NEWYORK
BlackRock Inc. sold a $12.5 billion bond Monday at 7.53 percent, with demand reaching only $20 billion—a 1.6 times oversubscription ratio. The 288 basis point spread over U.S. government debt marks the widest for an A-rated or higher bond in three years, according to JPMorgan Chase & Co. strategists.
For AI-linked jumbo issuers this year, 4x demand multiples have been the norm. This offering fell 60 percent short of that average, a stark reversal in a sector that has raised over $570 billion since the AI borrowing surge began in 2025.
The debt finances a 1-gigawatt Texas data center, a joint development between Meta Platforms Inc. and BlackRock valued at $14 billion total. The extended syndication process—nearly a week—and unchanged pricing from initial discussions are rare for investment-grade bonds, which typically price same-day.
Credit-default swaps on major AI infrastructure players including Meta, Alphabet Inc. Oracle Corp. and SpaceX have widened sharply, reflecting heightened default risk perception in the sector. The repricing extends beyond BlackRock: Goldman Sachs Group Inc. and JPMorgan this week launched new products for managing tech debt exposure, including a basket of 18 equal-weighted high-yield issuers such as CoreWeave Inc. and Applied Digital Corp.
The demand collapse and spread widening signal that what institutional investors once priced as a premium for AI exposure is now demanding a duration risk surcharge. The cost of capital for AI infrastructure projects is rising meaningfully, and the once-fervent bid for the sector has cooled.
