Coreweave borrowed $20 billion through the U.S. junk bond market on Wednesday, injecting new capital into AI data center operators after its debut on Wall Street in March.
People briefly said lenders were shocked by the prospects and economic impact of Coreweave to the global tariff war and had strong investor orders that allowed its bankers to increase the size of the issuance and ensure it was ensured on better terms than originally expected.
Executives described investor demand for their debt as “strong,” prompting Coreweave to raise more than $500 million in plans. The new bond matures in 2030 with an interest rate of 9.25%.
The result marks the popularity of Coreweave after it was forced to cut the size of its initial public offering in March. Stocks soared 16% on Wednesday and are now up more than 160% from listing.
Investors have a lot of demand for high-yield debt following the announcement of “liberation day” trade tariffs by U.S. President Donald Trump.
To demonstrate this strong appetite, Coreweave was able to form new debts as unsecured bonds, with the same qualifications as existing secured debts.
“Equity and credit markets seem to think the worst is behind us, even if many tariff details still need to be phased out,” said Dec Mullarkey, managing director of Fund Group SLC Management. “The White House signal that it is willing to be flexible and motivated has certainly eliminated the risk mood.”
CoreWeave lends computing power to technology companies that are building AI models. After becoming a cryptocurrency miner in 2017, it spun in two years and has grown rapidly with the wider AI boom in recent years.
Coreweave hoped to raise $2.7 billion on the IPO, but demand was insufficient at the time, and the deal weighed just $1.5 billion.
Investors are concerned about the demand for AI infrastructure and the company's huge debt burden. CoreWeave's entry into the junk bond market will allow it to refinance its overall debt burden at lower interest rates. It separately revealed that it hopes to receive up to $2.6 billion in $2.6 billion through a new loan.
Debt sale is collected in debt issuance as it rebounds from April volatility.
CoreWeave still relies on relationships with Nvidia and Microsoft, S&P Global analysts said in a note describing their allocation to B-Plus credit ratings. The individual B rating is deep in the junk field, indicating that investors face higher risks when investing in bonds.
"The company's important supplier concentration in NVIDIA and Microsoft's customer concentration is beneficial today, but could pose risks within three to five years," Standard & Poor's analysts wrote.
CoreWeave did not respond to a request for comment.