Anthropic offers Blackstone a yield of more than 10% on $9 billion tied to chip leases
Blackstone's $9 billion would take losses before a larger slice that Broadcom would backstop.
Key takeaways
Anthropic is offering Blackstone a yield of more than 10% to put $9 billion into debt exposed to the company's five-year lease payments on chips, the Financial Times reported on Friday, Oct. 16.
Reuters carried the account Friday evening and said it could not immediately verify it. Citing people familiar with the matter, the Financial Times account said Blackstone funds would invest the $9 billion. Neither company was quoted, and the financing was not described as closed.
Friday's $9 billion is the piece Bloomberg, on Oct. 2, said Blackstone would put in from its own funds. Broadcom had started gathering $60 billion to finance chips for Anthropic and other companies, Bloomberg reported, and the deal had not been announced.
In that account, about $42 billion would be senior, paid first, and Broadcom would backstop it. The other $18 billion would be junior, taking losses first, with no such backstop. Blackstone would lead that junior layer, and its $9 billion would be half of it.
A yield of more than 10% on that half is more than twice the 4.89% yield on the five-year U.S. Treasury note.
The Treasury curve sat far below 10% on Friday
On March 31, CoreWeave said it had closed rated, secured debt at a much lower yield than the junior layer. The $8.5 billion facility included a fixed-rate piece at about 5.9% and was anchored by Blackstone Credit & Insurance, the company said. Moody's Ratings assigned it A3, an investment-grade rating, and it was secured by substantially all the assets of a CoreWeave subsidiary.
Most of Anthropic's infrastructure bill cannot be canceled
Lenders are exposed to lease payments from a company that has already made most of its infrastructure spending hard to unwind. Anthropic expects to spend at least $518 billion over a decade on infrastructure with six partners, and about 80% of that sum cannot be canceled or must be paid whether the capacity is used, Reuters reported on Sept. 29, citing a confidential prospectus the company has prepared for a public share sale.
Frequently asked questions
Is the Blackstone financing closed?
No, the financing was not described as closed, and Reuters said it could not immediately verify the report.
What risk does Blackstone's $9 billion take?
It would take losses before a larger slice that Broadcom would backstop.
How does the offer compare with Treasuries?
More than 10% is more than twice the 4.89% yield on the five-year U.S. Treasury note.
How exposed are lenders to Anthropic's infrastructure bill?
Anthropic expects to spend at least $518 billion over a decade, and about 80% cannot be canceled or must be paid whether the capacity is used.
