AI Credit Default Swaps Hit Record as Oracle, CoreWeave Spreads Blow Out
The bond market just delivered its harshest verdict yet on the AI boom. The market for AI credit default swaps flashed its brightest warning overnight: five-year default insurance on Oracle widened by 26 basis points to a record 288 bps, the most expensive it has ever been to insure the cloud giant’s debt, according to S&P Global Market Intelligence data cited by Reuters. SoftBank’s five-year spread widened 24 bps to 424 bps. And at data center operator CoreWeave, the number blew past 1,000 bps, per LSEG data. In plain English, it now costs $2.88 a year to insure $100 worth of Oracle bonds against default, and roughly ten times that, proportionally, for CoreWeave. Insurers don’t charge record prices to healthy borrowers. ...