CoreWeave's Implied Default Risk Hits 64% as Bond Yield Rises to 15%
Key Facts
CoreWeave's credit default swap spreads exceeded 1,100 basis points on Thursday, October 15, 2026, according to S&P Global Market Intelligence data cited by Reuters, amid pressure on the company's debt. Reuters said the contracts' pricing implied a 64% probability of default over the next five years. That compares with about 30% a year earlier, an estimate derived from credit protection prices. The repricing extended to the company's bonds issued in June at a yield of 9.675%. Those bonds fell in value, pushing their yield to 15% during the week of turmoil, according to the Reuters report published on October 16.
The pressure on debt comes after CoreWeave reported revenue of $2,575 million in the second quarter of 2026, compared with $1,212 million in the corresponding period of 2025. Net interest expense was $640 million, compared with $267 million in the same period a year earlier, according to the company's results. The company said its contracted revenue backlog stood at about $104 billion at the end of June. Recognition of that revenue is subject to meeting delivery requirements and making services available to customers. In a financing disclosure filed with the U.S. Securities and Exchange Commission in August, the company said the facility's tenor was approximately five years, exceeding the three-year average duration of the underlying customer contracts.
Addressing financing concerns, Reuters cited co-founder Brannin McBee as telling the Financial Times that CoreWeave was seeking an investment-grade credit rating. He said that would open up sources of capital he described as "unlimited." Speaking to reporters in Stockholm, Nvidia chief Jensen Huang said "CoreWeave's financial strength is improving every day," according to the agency's report published on Thursday. Bret Kenwell, an investment analyst at eToro, said the sharp rise in bond yields had clearly unsettled investors. But he added, according to Reuters, that this "does not mean CoreWeave's bankruptcy is inevitable."
In the stock market, the Nasdaq Composite fell 2.1% in Friday's session on October 16, according to the Associated Press. It lost 4.5% over the week ended that day, marking its worst weekly performance since June. In results from another AI infrastructure company, Nebius reported group revenue of $582.3 million in the second quarter of 2026. The company said in its shareholder letter that revenue rose 454% from the corresponding period a year earlier. Its reported cash balance stood at about $8 billion at the end of the second quarter, according to the same letter.
Nebius announced its first secured debt facility in July, worth approximately $775 million. The company said the financing was intended to accelerate the global expansion of its cloud platform. The facility is backed by deployed graphics processing unit infrastructure. Its collateral also includes contractual cash flows from an agreement with an investment-grade customer, according to the company's statement. The facility carries an interest rate equal to the Secured Overnight Financing Rate plus a margin of 2.50 percentage points.
In August, Nebius closed a convertible bond offering with gross proceeds of approximately $5.75 billion, according to the company's announcement. The offering includes bonds bearing interest at 0.50% and maturing in 2030. It also includes other convertible bonds bearing interest at 4.50% and maturing in 2034. The secured debt facility announced in July matures on October 31, 2030. Regarding expected inflows during 2026, Nebius said in its shareholder letter: "We expect to receive more than $9 billion in customer prepayments."