Anthropic · OpenAI · Nvidia · New York · Wall Street · Ars Technica
Chipmaker Nvidia seeks to raise over $25 billion in first bond agreement since 2021
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Chipmaker Nvidia is planning to sell $25 billion of investment-grade debt in the US on Monday, its first bond sale in five years, in a test of investor appetite for further exposure to the AI sector.
Key facts
- The issuance was upsized from $20 billion after receiving more than $85 billion in orders by early afternoon in New York, according to people familiar with the deal
- However, after its valuation peaked at about $5.7 trillion in May, its shares have fallen alongside the wider semiconductor market in recent weeks, with its market capitalization dropping below $5
- Thanks to robust demand, the 10-year portion of the bond was expected to yield 0.5 percentage points above US Treasuries, down from 0.75 percentage points during initial discussions, one
- Monday’s offering is at least three times larger than Nvidia’s previous bond sale in 2021 during the coronavirus pandemic, when it raised about $5 billion
Summary
In a marquee seven-part bond offering, the company will issue a wide range of maturities from two years to 30 years, according to a term sheet seen by the FT. The issuance was upsized from $20 billion after receiving more than $85 billion in orders by early afternoon in New York, according to people familiar with the deal. Thanks to robust demand, the 10-year portion of the bond was expected to yield 0.5 percentage points above US Treasuries, down from 0.75 percentage points during initial discussions, one of the people said. Favorable market conditions after the US-Iran deal are allowing Nvidia to raise debt at a relatively low cost, said Lauren Wagandt, a portfolio manager at T Rowe Price.