Investors are dumping data centre bonds as confidence wanes that AI boom revenues will support the debt financing infrastructure. Prices for bonds funding projects like Hyperion and Project Excalibur have fallen well below par, with Blue Owl and Meta-backed Beignet Investor debt slipping to under 92 cents on the dollar. Hut 8-developed bonds in Louisiana and Texas dropped to 94 and 92 cents, while Blackstone-owned QTS data centre bonds (Project Excalibur) fell below 88 cents.
Analysts cite a multitrillion-dollar gap between AI infrastructure spending and revenue needed to service debt. OpenAI’s IPO delay and slowing Anthropic sales growth have intensified doubts. Ludovic Subran of Allianz called it a 'Darwin moment' for weak credits, noting credit spreads have surged due to power and construction delays.
Meanwhile, Thames Water’s senior creditors are nearing a deal with junior bondholders to avert a legal challenge, offering equity slices and fees to secure control of the utility after months of restructuring delays.
Source: Financial Times Markets · Summarized by HeadlinesBriefing