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      Broadcom's Credit Default Swap Spreads Hit Record High Amid $100 Billion Debt Deal

      Broadcom's credit default swap (CDS) spread surged to a record 122 basis points following the announcement of a significant off-balance-sheet debt structure that could total approximately $100 billion. This financing move involves the chipmaker negotiating over $60 billion in senior secured debt through special-purpose vehicles (SPVs), with an additional junior tranche of around $30 billion. The purpose of this arrangement is to facilitate the purchase and leasing of custom AI chips to major clients, including Anthropic.

      The deal, reported by Bloomberg, builds on a partnership established in June 2026 between Broadcom, Apollo Global Management, and Blackstone, which initially focused on enhancing Anthropic's compute capacity using Broadcom's chip technology. Analysts have indicated that the total senior debt capacity within this structure could expand to hundreds of billions by 2029, reflecting Broadcom's ambitious plans in the AI sector.

      Despite the potential for significant revenue growth, with projections suggesting AI-chip revenue could exceed $100 billion by fiscal 2027, credit markets are expressing caution. Bond spreads have widened by 20 to 45 basis points compared to industry peers, as analysts from Bank of America highlight rising contingent liabilities that may impact Broadcom's credit ratings. The success of this debt structure hinges on sustained demand for AI chips, as any downturn could lead to substantial liabilities for Broadcom.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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