Blackstone Inc.: “Anthropic unlikely to secure an investment-grade credit rating even immediately after IPO”

[Financial News]  

Blackstone Inc., the world’s largest private equity firm, forecast that even Anthropic’s IPO next month—set to be the largest ever for an AI startup—would not dramatically improve its credit rating.
FT reported on the 30th (local time) that Blackstone Inc. had told investors this. Blackstone Inc. had previously forecast that Anthropic’s credit rating would rise to investment grade on the back of its IPO, but has now abandoned that optimism. This suggests that financing the huge spending on AI investments will be far more complicated than expected. The outlook emerged as tech stocks on the New York market fell sharply for a second straight day, with earnings reports from Big Tech companies such as Alphabet Inc. and Amazon.com, Inc. failing to clearly demonstrate returns on AI investment.

FT reported, citing sources, that Blackstone Inc. had conveyed this bleak outlook to investors. According to the sources, Blackstone Inc. recently expected Anthropic’s $63 billion semiconductor financing plan to still receive a “junk bond” rating from major credit rating agencies after its IPO. The rating would be “high” within the junk-bond category, but would still remain speculative grade.
Blackstone Inc. is working with banks as an “anchor investor” in the financing process it calls the “North Star Plan (Project North Star),” helping sell corporate bonds to other investors.
Anthropic had earlier made its November listing official by releasing its IPO prospectus (S-1) on the 26th. In the filing, Anthropic said it plans to invest more than $800 billion in AI infrastructure by 2045.
A key lever for realizing this ambition is securing an investment-grade rating for Anthropic’s debt, which would allow it to raise funds more cheaply than it can now. It currently holds more than $112 billion in cash and cash equivalents, but even if it raises about $100 billion through this IPO, it will need a large injection of outside capital, including through corporate bond issuance. With a junk-bond-level credit rating, the viability of such enormous fundraising is bound to be questioned, and it is likely to weigh on the share price afterward.

Above all, a junk-bond rating would sharply limit the pool of funds Anthropic can access, since many insurers and pension funds restrict investment in junk bonds. Anthropic will ultimately have no choice but to seek debt financing with highly rated suppliers such as Broadcom and Nvidia involved.
As investors’ confidence in the AI theme was shaken again by earnings shocks from Alphabet Inc., Amazon.com, Inc. and Intel, Blackstone Inc.’s pessimistic forecast that Anthropic would remain junk-rated even after its IPO dealt a major blow to tech stocks on the New York market that day.
A portfolio manager who mainly invests in U.S. tech stocks said, “The key is the credit rating—it really matters. If Anthropic does not receive an investment-grade rating, its credit costs will jump. That’s good for no one.”
Anthropic, which has yet to go public, has not been officially rated by the Big Three credit rating agencies—Standard & Poor’s (S&P), Moody’s and Fitch. Smaller credit rating agencies are assigning it junk-bond ratings.

[email protected] Song Kyung-jae Reporter