CoreWeave bows to investor pushback on debt linked to Anthropic contracts

CoreWeave has offered major concessions to win over investors in its latest $2.6bn loan supported by its computing deal with Anthropic, underscoring Wall Street’s waning enthusiasm to fund the AI boom.

The cloud computing company has raised yields on the debt to nearly 9.1 per cent and tightened lender protections to get the deal across the finish line after a week of sluggish demand, people familiar with the matter said.

Key deal sweeteners include a bespoke “lockbox” feature that ensures incoming cash from underlying contracts is used for debt repayment before other expenses. The lockbox would stay in place until CoreWeave pays down half of the debt, and can also be triggered if the lease rate drops below a certain threshold, the people said.

The lacklustre demand earlier this week for CoreWeave’s loan reflects a cooling investor appetite against the backdrop of a recent rout in AI stocks. The former crypto miner had been able to drive down its borrowing costs over the past two years with debt packages backed by leases on graphics processing units and customer contracts.

Orders on the deal soared to nearly $9bn on Thursday morning after CoreWeave updated the borrowing terms on Wednesday night, the people said.

It also lured investors with an improved pricing of 5.5 percentage points above the benchmark Secured Overnight Financing Rate at a discounted price of 96 to 97 cents on the dollar, according to a term sheet seen by the FT. That represented a 1 to 1.25 percentage point increase from initial price discussions.

CoreWeave and Anthropic in April announced a multiyear agreement for the latter to rent cloud-computing capacity from the former. Just two months ago, the company secured $3.1bn in a similar financing package supported by computing contracts with OpenAI at just 4.5 percentage points above benchmark.

A CoreWeave spokesperson told the FT on Thursday that it is “pleased with the outcome of this financing . . . [which] reflects the continued maturation of…