Data Centre Bonds Sell Off as CoreWeave Debt Hits Record Low and AI Listings Are Pulled
Summary
Updated Oct 15 — CoreWeave shares rebounded 5.94% Thursday as management defended a $100B-plus backlog, while Oracle's credit spreads widened.
- • Investors sold data centre bonds on Oct 13-14 as concern grew over AI borrowers' debt
- • CoreWeave high-yield bonds reportedly fell from 85 to as low as 77 cents on the dollar
- • Firmus Technologies abandoned its planned Australian IPO, citing market volatility
- • CoreWeave credit default swaps hit record highs; Nebius and Terawulf shares also fell
Updates
CoreWeave's total debt and obligations now exceed $51 billion, with its 2031 bond yielding 15.78%
Yield to maturity on the 9.75% bond due 2031 reached 15.78%, far above its coupon, meaning investors demand a steep premium. S&P's Gavan Nolan notes heavily negative free cash flow.
CoreWeave five-year CDS spiked above 1,140 bps, last near 1,038 bps, up 16% week-over-week
S&P's Gavan Nolan said a spread above 1,000 bps generally signals credit distress; demand is not in question given hyperscaler contracts, the issue is whether cash flows arrive.
CEO Intrator memo says market 'misunderstands' CoreWeave; backlog over $100B, about two-thirds investment grade
Per Deutsche Bank, which kept its buy rating, counterparties include Microsoft, Meta, IBM and Caterpillar. Stock fell Thursday then closed up 5.94% after Wednesday's 15.5% drop.
Oracle five-year CDS rose about 10% on the week to 282 bps, raising contagion and downgrade concerns
Jim Reid warns a BBB downgrade could force investment-grade-only investors to sell. Evercore ISI said the market is 'saying no mas to AI debt without operating cash flow support.'
Details
Investors dumped data centre bonds on Oct 13-14, 2026
The selloff is framed as a 'Darwin moment' for AI borrowers, meaning weaker, highly leveraged companies may struggle to refinance while stronger ones survive.
CoreWeave high-yield bonds fell from about 85 cents on the dollar Friday to as low as 77 on Wednesday
Reported as a record low for the bonds. Some yields reportedly reached as high as 17%, which sharply raises the cost of new borrowing.
CoreWeave credit default swaps hit record highs against roughly $35bn of debt
Higher CDS prices mean the market is paying more to insure against a CoreWeave default, a direct gauge of rising credit risk.
CoreWeave shares fell by as much as 16%, with Nebius and Terawulf also sharply lower
Declines across other AI infrastructure names suggest investors see this as a sector-wide concern, not a single-company problem.
Firmus Technologies abandoned its planned Australian IPO on Friday, citing market volatility
The listing targeted a valuation of up to A$44bn and a raise of about A$7bn. Its collapse preceded the bond selloff.
Blackstone-backed AirTrunk's listing was reportedly pulled or paused alongside Firmus's
Reports on Oct 15 tie both deferrals to scrutiny of valuations, leverage and returns, signalling capital markets are tightening for data centre issuers.
Scrutiny centres on whether AI data centre valuations, debt loads and returns are sustainable
This is the reported market narrative, not an established outcome. Figures come from secondary research of FT, Telegraph and Reuters coverage.
Market Impact = price/market moves, Financials = debt and credit figures, Industry Update = business moves, Insight = analysis
What This Means
Lenders and IPO investors appear to be pulling back from financing AI data centres, which have relied heavily on borrowed money. If the stress persists, highly leveraged builders like CoreWeave could face higher funding costs and harder refinancing, which may slow capacity expansion. Companies that depend on that capacity should watch whether this stays a repricing or becomes a broader credit squeeze.
Sentiment
Mostly concerned about AI infrastructure debt risks, with some defending the fundamentals
“The debt is. At Jun 30 it had $35.1B of debt plus $16.5B of leases against $5.5B of cash. That's 1.5x its market value today... Every $10B it borrows at ~15% costs $1.5B a year.”
“AI Infrastructure Just Faced a Credit Test. Hot CPI and CoreWeave’s bond selloff hit AI infrastructure from cloud to chips and optics. The move repriced debt-heavy growth and expensive valuations.”
“AI debt is now the story. CoreWeave -16%, Dell -10%, Nebius -9%, Oracle -7%, HPE -6.4%, Nasdaq -1.4%. CoreWeave's bonds are yielding - 14.8% and default insurance on Oracle/CoreWeave is at record highs.”
“The $CRWV selloff over its bonds yielding 15% is completely irrational. 15% is NOT the interest rate CoreWeave is paying on its debt... In March 2026, $CRWV secured $8.5B in GPU-backed financing... at just 5.9%.”
Split
~70/30 concerned vs. defensive on fundamentals (debt repricing vs. strong backlog/collateral).