Space X Default Risk Hits Fresh Peak as Tech-Led Selloff Builds Kevin Kingsbury The cost to protect Space X debt against default hit a record high Thursday, extending a move sparked by US election results that raised political risks for Elon Musk’s Texas-based companies. Shares in Musk’s Space X and Tesla Inc. tumbled amid a broad equity market selloff, led by a rout in chipmakers.
Five-year credit default swaps on Space X, the aerospace and space technology company, widened as much as 14.6 basis points to 284.3 basis points a year, according to ICE Data Services. The risk gauge’s most recent high was set on Oct. 30.
The move contrasts with tightening in the CDS of hyperscalers since the midterm election sweep by Democrats, including wins in Texas’s gubernatorial and Senate races. Debt investors in big tech stand to benefit from a slowdown in artificial intelligence development if the pace of borrowing slows.
"Tougher permitting, grid-cost rules and local opposition could slow the next buildout wave," Bloomberg Intelligence credit analyst Robert Schiffman wrote in a Thursday note.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing