CoreWeave Seeks $8.5 Billion Loan From Banks Backed by Meta Deal
Photographer: Michael Nagle/Bloomberg
(Bloomberg) — CoreWeave Inc. is looking to raise about $8.5 billion from banks including Morgan Stanley and Mitsubishi UFJ Financial Group Inc. to help finance a buildout of cloud computing capacity for Meta Platforms Inc., according to people familiar with the matter.
The proposed delayed-draw term loan would be backed by a contract Meta signed last year to pay CoreWeave up to $14.2 billion for its services, said the people, who asked not to be named discussing private information. It’s also supported by a separate agreement between the two reached earlier this year valued at more than $5 billion that hasn’t been previously reported, they said.
Most Read from Bloomberg
While CoreWeave carries a speculative-grade rating from major credit assessors, Meta’s blue-chip profile is expected to support an investment-grade rating on the loan, lowering its borrowing costs, the people added.
Photographer: Yuki Iwamura/Bloomberg
CoreWeave has dramatically ramped up borrowing in recent years to finance deals in which it rents access to high-end artificial intelligence processors, joining an industrywide debt binge that has unsettled some investors. The company’s adjusted leverage, a measure of debt to earnings, stood at about 6.9 times as of Sept. 30, and it’s expected to burn cash for at least the next 18 months amid heavy capital expenditures, according to a recent Moody’s Ratings report.
Morgan Stanley and MUFG are in the process of privately syndicating the loan to other lenders, and the transaction is expected to close in March, said the people, asking not to be identified discussing confidential information.
Representatives for CoreWeave, Morgan Stanley and MUFG declined to comment. Meta didn’t immediately respond to requests for comment.
CoreWeave has turned to multiple financing channels to fund the capital-intensive expansion needed to keep pace with the AI boom.
The company has already used the delayed-draw term loan structure in three prior facilities, each backed by a combination of the revenue from contracts to rent chips and the value of the chips themselves. Delayed-draw loans allow the borrower to tap the funds over time instead of receiving the cash all at once.
Pricing on the new loan is being discussed at about 2.25 percentage points over the Secured Overnight Financing Rate, which would translate into an interest rate of roughly 6% at current levels, the people said.
Click here to see Bloomberg’s AI Infrastructure Debt Monitor
Conservative estimates peg the cost of the AI buildout at $3 trillion or more, too much for even the so-called hyperscalers to fund with cash flow alone. So companies are turning to debt investors across a variety of asset classes and lenders to finance the creation of new data centers, the purchase of chips and more.
Last year, AI-related firms and projects tapped debt markets for at least $200 billion — likely a significant undercount, as many deals are private. Projections are in the hundreds of billions of dollars of issuance for 2026 alone.
CoreWeave has roughly $8 billion outstanding under its existing delayed-draw term loans, and has about $14 billion of total debt, according to filing information through Sept. 30. It also sold more than $2.25 billion of convertible senior notes in December. The company plans to report earnings on Thursday.
The fundraising comes amid growing investor unease about the pace of AI-related spending, the technology’s broader market implications, and the increasingly interconnected nature of the deals underpinning the sector. Nvidia Corp., a major supplier of the chips at the center of the buildout, is also a significant backer of CoreWeave, underscoring the tight financial and commercial links tying together many of the industry’s largest players.
CoreWeave’s shares jumped more than 350% in the months following its March initial public offering, but have since fallen nearly 50% from their peak amid a rout in artificial intelligence related stocks broadly.
The company’s delayed-draw term loans, including the new one, fall into a type of lending called GPU finance, where typically a special purpose vehicle is used to raise the funds and owns the chips. CoreWeave has previously included these loans on its balance sheet because the company guaranteed the debt, the people said.
While this new loan did not need a parent guarantee due to the strength of Meta’s contracts, CoreWeave is expected to still include it on its balance sheet for transparency, the people added.
“CoreWeave is rapidly evolving its complex debt capital structure as it seeks to finance its significant capital expenditure needs,” S&P Global Ratings analysts wrote in a Dec. 10 report.
–With assistance from Riley Griffin, Ian King and Dina Bass.
