Anthropic to Pay Double-Digit Interest on Blackstone Loan, With Yield Above Junk-Bond Levels

[Financial News]  

The Financial Times (FT), citing sources on the 17th (local time), reported that Anthropic would raise $9 billion (about 12 trillion won), agreeing to pay Blackstone interest of more than 10%. Its funding costs have risen sharply from the 8.5% rate just four months ago.
Anthropic’s large-scale fundraising is part of its $60 billion “North Star Project.” The company plans to use the money to procure 1.5 gigawatts (GW) of so-called TPUs (tensor processing units), custom chips developed by Google.
The plan is the largest semiconductor procurement effort ever and is expected to serve as a gauge of how attractive investors find debt issued by AI companies. In recent months, concerns about massive investment have grown in financial markets, driving up the cost of AI-related funding.

According to the FT, Blackstone has agreed to buy half of the $18 billion in subordinated bonds Anthropic plans to issue to lease TPUs for five years—a $9 billion portion.
However, sources say Blackstone, the world’s largest private equity firm, is expected to earn a yield far above the 10% stated interest rate (coupon) offered by Anthropic, because an original-issue discount and other fees will be added. The 10% yield offered by Anthropic is already higher than typical U.S. junk-bond yields. According to the “ICE Bank of America (BofA) BB US High Yield Index,” issuers with credit profiles similar to Anthropic’s typically pay yields of around 7% in the public bond market.
Sources said the remaining $9 billion in corporate bonds could be issued to a broader range of investors at a lower yield in the coming months.
Anthropic also raised about $4.4 billion through borrowing for its “Big Sky Project” four months ago, but the interest rate then was just 8.5%.
The fact that borrowing costs—the yield on its corporate bonds—have jumped from 8.5% to more than 10% in just four months also indicates that investors see greater risks in financing AI infrastructure development. Investors are increasingly concerned that AI companies are racing to expand infrastructure to avoid falling behind one another, even though they are not generating profits commensurate with the investment.
Yields are also climbing because many companies have turned to AI investment in a short period and are offering more attractive terms to secure funding before their competitors do.

Now in its fifth year, frontier AI company Anthropic currently has a credit rating just one notch below investment grade. Credit rating agency KBRA assigned it that rating this past June, and the subordinated corporate bonds being issued now are also expected to receive the same rating. Ahead of its planned IPO, Anthropic aims to raise its rating to investment grade to lower its funding costs, but it appears unlikely to move beyond its current level anytime soon.
Of the $60 billion in total funding required for Anthropic’s North Star Project, $42 billion will be raised through an issuance of senior bonds whose payments are guaranteed by Broadcom, which is developing TPUs with Google.

[email protected] Song Gyeong-jae Reporter