SpaceX (SPCX.US) plans to raise 40 billions in debt, causing investor concerns as credit risk indicators hit a record high since trading began

According to Jinse Finance APP, following reports that SpaceX (SPCX.US) is in talks with banks and investors to raise $40 billion to purchase NVIDIA (NVDA.US) chips, investors' concerns about the company's large-scale borrowing have intensified. On Wednesday, SpaceX’s credit risk indicators rose to their highest levels since trading began, and its bonds also significantly weakened in the secondary market.

ICE Data Services shows that the price of SpaceX’s five-year credit default swaps (CDS) jumped 14.5 basis points on Wednesday to around 195.4 basis points per year, hitting an intraday high since the relevant CDS began actively trading in June this year. CDS prices typically rise as investors’ concerns over a company’s debt repayment risks grow, so this change reflects the increasing cost for the market to obtain default protection on SpaceX’s debt.

This pressure has also spread to the U.S. investment-grade bond secondary market. As of early trading on Wednesday, the credit spread on SpaceX’s 6.65% coupon bonds maturing in 2056 widened by 12 basis points to 238 basis points, much higher than the 175 basis points at the time of issuance in June this year. That batch of bonds was part of SpaceX’s $25 billion debt financing package.

This market volatility stems from news that SpaceX is seeking a new round of massive financing. According to reports, the company is considering raising around $40 billion to purchase NVIDIA chips, supporting AI infrastructure construction. If completed, this would become one of the largest debt financing deals yet seen in the current AI infrastructure investment boom.

Citing sources, media reports state that SpaceX plans to complete the financing through about $10 billion in bank loans and $30 billion in investment-grade bonds, with Apollo Global Management leading the related financing arrangements. The deal is expected to be completed no earlier than 2027. However, financing talks are still at an early stage and may ultimately fail to materialize. SpaceX has not responded to these reports so far.

SpaceX’s potential financing plan comes as tech companies and AI model developers are taking on large amounts of debt to construct AI infrastructure. To build and lease large data centers equipped with massive quantities of high-performance chips, related companies are investing and raising hundreds of billions of dollars. The rapid global expansion of computing power infrastructure is also driving up the costs of land, AI chips, electricity, and power generation equipment, giving rise to a series of ultra-large-scale financing deals.

Sal Naro, Chief Investment Officer at Coherence Credit Strategies, stated that the market is currently facing an “unprecedented supply of debt,” with no clear end in sight for now. He believes the global scale of ongoing AI infrastructure construction is unprecedented, and its uniqueness lies in the fact that many of these projects are being launched almost simultaneously worldwide.

SpaceX is not the only company recently seeking massive AI-related financing. According to reports, Broadcom (AVGO.US)’s Wall Street underwriting team has also begun planning a new round of AI chip financing, amounting to about $60 billion, to support the needs of companies such as Anthropic.

As the scale of AI infrastructure investment continues to expand, the market’s focus on tech companies’ financing needs and debt burdens is also increasing. For SpaceX, if the potential $40 billion financing is ultimately secured, it will further increase the company’s debt load, while the record high CDS price and widening bond spreads indicate that investors are already demanding greater risk compensation.