The growing demand for capital to fund AI investment is filtering into asset-backed securities bonds secured by equipment loans and leases. Stonebriar Commercial Finance is selling around $869 million of asset-backed securities, one of the first broadly syndicated equipment financing ABS backed in part by AI chip loans, known as GPU loans. Those loans account for about 15% of the collateral. Separately, Wingspire Equipment Finance raised more than $407 million through an equipment loan and lease ABS, with GPU loans making up about 20% of the collateral.
Equipment ABS have not typically had GPU financing as collateral, though a few recent deals had limited exposure, said Michael Nowakowski, head of structured products at Conning & Co. "As long as loans are amortizing with lower loan-to-values and the percentage doesn’t start to creep up over time, we’re not as concerned," he said. The deals come as financing for chips and servers that power AI grows more common.
Broadcom Inc.’s Wall Street lenders are working on more than $60 billion of financing for AI chips. A group of banks is also providing a $22 billion chip loan to Blackstone Inc. and Alphabet Inc.’s new cloud venture Crux AI. Core Weave Inc. earlier this year offered a $3.1 billion broadly syndicated loan backed by GPUs. Stonebriar’s bonds are expected to settle on Oct. 14 and be rated AAA to BBB-.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing