CoreWeave Bond Yields Near 15% as Debt Pressures Mount
Key Facts
The yield on CoreWeave bonds issued in April approached 15% on October 15, according to Reuters, as pressure mounted on financing the company's expansion of artificial intelligence infrastructure. The cost of insuring its debt against default rose to about 1,000 basis points, the agency reported. The bond cited in its report last traded at 79.15 cents on the dollar, according to Tradeweb data quoted by Reuters. The agency estimated the company's debt at about $50 billion as it presses ahead with expanding its infrastructure. Brett Kenwell, an investment analyst at eToro, said "the sharp rise in bond yields has clearly worried investors, but it does not mean CoreWeave is inevitably heading for bankruptcy."
The selloff spread to other company bonds, with a Reuters follow-up published on October 16 covering an issue sold in June. The agency said the yield on that issue rose to 15% during the week of turmoil, compared with 9.675% when it was issued. Facing the pressure, Chief Executive Mike Intrator defended the company in a memo to employees on Wednesday. He said markets can "misunderstand and act irrationally," according to Reuters, which cited the memo. In August, the company raised the upper end of its annual capital expenditure forecast by $4 billion to $39 billion, the agency reported.
The expansion coincided with CoreWeave's revenue rising to $2,575 million in the second quarter, according to results released by the company. Revenue in the corresponding period was $1,212 million, placing its business growth alongside the increase in financing costs. Net interest expense rose to $640 million in the second quarter, according to the same earnings statement. That expense had stood at $267 million in the corresponding period, before the increase recorded in the company's latest results. The net loss widened to $626 million from a loss of $290 million in the corresponding period, despite higher revenue.
On contracted business, CoreWeave said its future contracted revenue backlog stood at about $104 billion at the end of June. Microsoft accounted for about 67% of the company's revenue in 2025, according to Reuters, citing CoreWeave disclosures. That share rose from 62% in 2024 as the customer's contribution to the company's annual revenue increased. To finance its expansion, CoreWeave announced in September the pricing of an offering of convertible senior notes with an aggregate principal amount of $3.7 billion. The notes carry interest of 2.875% and mature in 2033, according to the company's investor statement.
CoreWeave announced in August that it had closed a $2.6 billion delayed-draw loan facility, according to a statement filed with the U.S. Securities and Exchange Commission. The company earmarked the facility for expanding its infrastructure, among the financing arrangements it announced before the bond selloff. It said in the statement that the facility received a Ba2 rating from Moody's. Fitch assigned it a BB+ rating, according to the same statement, which set out both loan ratings. The facility matures on September 1, 2031, according to the regulatory disclosure of its terms.
Alongside its borrowing, CoreWeave established an at-the-market share sale program in September, according to its announcement to investors. The program allows the sale of up to 35,000,000 Class A shares, providing a potential channel for equity financing. The company stressed that it is under no obligation to sell any shares under the program. The terms of the delayed-draw loan facility include a commitment period during which funds are available to draw, according to the disclosure filed with the U.S. Securities and Exchange Commission. That period ends in December 2026, the next specified date in the company's financing availability schedule.