Stories
AI Borrowers Face Tough Sell in Risky US Credit Markets Amid Unproven Earnings
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CNBC TV18•30-09-2026, 20:53
AI Borrowers Face Tough Sell in Risky US Credit Markets Amid Unproven Earnings
- •AI-related issuance by low-rated firms has surged to $88 billion this year, primarily from US issuers, a significant jump from $20 billion in the first 11 months of 2025.
- •Lenders are demanding higher compensation from less-established AI borrowers due to unproven future earnings, questioning revenue projections, collateral value, and debt support capacity.
- •Risk appetite for AI-related credit remains subdued, with leveraged finance buyers favoring higher-quality, double-B-rated companies with predictable revenue streams and tangible assets.
- •Data centers are driving much of the activity in the high-yield market, with AI infrastructure supply reaching $40 billion this year, compared to $12 billion for the entirety of 2025.
- •Investors are increasingly skeptical, with borrowing costs for lower-rated AI companies potentially reaching 14-15%, and even near investment-grade issuers paying 9-10% yields.
Key Questions Answered
AI-related issuance by low-rated firms has totaled $88 billion, with most of the borrowing coming from US issuers.
Even near investment-grade BB+ rated issuers are paying yields of roughly 9% to 10%, while lower-rated borrowers could face borrowing costs as high as 14% to 15%.
Leveraged finance buyers are favoring higher-quality, double-B-rated companies with predictable revenue streams backed by long-term contracts, tangible assets, and established customer bases like data centers.
