CoreWeave's expanded borrowing plan sparks market unease, high-yield bonds continue to decline.

October 15 — As the high-yield bond selloff intensified, the credit risk of AI cloud computing company CoreWeave rose to a record high on Thursday. The company plans to further expand its borrowing, sparking concerns among bond investors. Data from ICE Data Services showed that the cost of CoreWeave's five-year credit default swaps (CDS) rose as much as 74.5 basis points to 1194.5 basis points, hitting an intraday record high. This means that swap market pricing reflects a probability of default exceeding 60% for the company over the next five years.

Meanwhile, CoreWeave's bonds on Thursday became one of the worst performers in the U.S. junk bond market. The financing boom in the AI sector is making bond investors uneasy, prompting the market to reassess the credit risk of some large technology companies, reflected in surging prices for credit default insurance, heightened market volatility, and weak bond performance. As an early entrant into the AI cloud computing sector that relies heavily on the high-yield bond market to finance its business expansion, CoreWeave has drawn particular attention.