Companies financing data centers increasingly tap junk bond investors. QTS Realty Trust Inc. sold $3.9 billion of bonds for a facility in [ADDRESS] tied to Microsoft Corp. Despite high-grade ratings, these notes yielded 7.23%, surpassing middle-tier junk bonds. Black Rock Inc. secured a 7.53% yield for a [ADDRESS] project. Underwriters marketed both to high-grade and high-yield buyers, underscoring fierce capital competition for artificial intelligence infrastructure.

Firms have borrowed over $410 billion for data centers this year. “[PERSON_NAME]” at Advent Capital Management noted high-yield investors visit investment-grade tech debt for fortress balance sheets at double-B spreads. Unlike past decades when tech giants used equity and cash flow, massive AI costs force unprecedented borrowing. Consequently, secondary notes from Oracle Corp. and Space X trade at junk-like yields.

Hyperscalers may spend nearly $800 billion on AI this year, mostly through debt. While elevated compensation attracts broader interest, limits remain. The [ADDRESS] junk bond market holds about $1.5 trillion and lacks liquidity. As borrowing costs rise, analysts warn shifting capital expenses will challenge future financing models.