BlackRock's bar for AI debt is 7% and secured; below it only Nvidia's balance sheet still works
Rick Rieder, who runs global fixed income at BlackRock, says he spent the weekend in this week's AI financings and is participating in some of them in a significant way. His terms, secured single-A paper near three-year maturities at about 7%, decide which AI builders can still borrow, and the rest are turning to the stock market.
Richard Tang · 3 min read
The missing voice in the AI-debt fight spoke on Monday night, and it was a buyer. Rick Rieder, BlackRock's+0.60% — BlackRock, up 0.60 percent today chief investment officer for global fixed income, told Bloomberg he had spent the weekend in this week's AI financings and was "participating in a pretty significant way" in some of them 1.
One of the industry's largest bond books is buying this debt on terms now on the record, and the terms split the buildout in two. We wrote Monday morning that the market was answering the AI debt question with rotation; the new fact since is the buyer's own conditions, in numbers.
His bar: secured, single-A, near three years
Rieder wants issuers that are "bigger, more mature," with cash flow "coming from a bunch of different ways," and secured 1. Single-A portfolios near the three-year point of the curve yield about 7%, paper he says he waited a career for and ranks above agency mortgages and parts of high yield 1.
This week's deals were engineered to that spec. Bank of America+0.33% — Bank of America, up 0.33 percent today, Citi+1.34% — Citi, up 1.34 percent today and Morgan Stanley+1.99% — Morgan Stanley, up 1.99 percent today, with Blackstone−1.05% — Blackstone, down 1.05 percent today, put $63 billion into a vehicle that buys Broadcom's+4.08% — Broadcom, up 4.08 percent today AI chips and leases them to Anthropic$350B — Anthropic, private, latest valuation $350B 2. Broadcom has promised to make up any shortfall in the equipment's value when the leases end, up to the size of the first-lien financing, and that promise is what secures the lenders' money 2.
SpaceX+2.75% — SpaceX, up 2.75 percent today closed $40 billion of debt for GPUs, in a lease run by the asset manager Apollo and carried by its investment-grade rating and Starlink revenue 34.
About 7% at BlackRock's bar, 15.84% below it
Data
| Value | |
|---|---|
| 10-year Treasury | 5% |
| Single-A portfolios (Rieder) | 7% |
| CoreWeave bond due 2031 | 15.84% |
Below the bar, only the supplier's credit still works
CoreWeave+7.29% — CoreWeave, up 7.29 percent today, the largest independent GPU cloud 6, watched its bond due 2031 set a record yield on Monday 5. Neocloud shares, the independent GPU-rental firms that include CoreWeave and IREN+7.22% — IREN, up 7.22 percent today, touched 52-week lows the same day 5. Elon Musk, announcing SpaceX's GPU financing, described the issuer's side of the same squeeze: "debt markets have almost entirely shut off access to money for any company that doesn't have substantial revenue independent of AI data centers" 4.
Whoever keeps building below the bar does it on the chip supplier's balance sheet. Nvidia's+1.23% — Nvidia, up 1.23 percent today latest filing shows as much as $164.5 billion of guarantees and commitments behind the data centers that run its chips, including a promise to buy any capacity CoreWeave cannot sell, through April 2032 6.
Excluded issuers are selling stock
Rieder's second point says where they go. The cost of debt, he said, has "equilibrated" to the cost of equity for some of these companies, which is why issuers raised in the debt market are now coming to the equity market 1.
Meta−0.81% — Meta, down 0.81 percent today went to the stock market for $95 billion on Monday, with Nvidia, AMD+5.20% — AMD, up 5.20 percent today and Broadcom interested in taking part 7. Anthropic, whose first-half revenue more than tripled its full-2025 total, filed for a Nasdaq listing that could trade from November 16 at a reported $2 trillion 8. Rieder rejects the bubble label: "these companies are throwing off real revenue, real cash flow" 1.
The buildout still gets its money, but on terms that separate collateral-backed issuers from the rest. BlackRock's bond clients get collateral. Public shareholders get the growth. The question to ask of any AI holding now is which of the two it is.
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