Blackstone-backed data center operator tests AI debt fears
QTS is expected to pay up for a new offering that’s nearly identical to the one it scrapped in April.
QTS, a debt-free data center operator backed by Blackstone, is experiencing a shift in AI-related debt financing costs. Just six months ago, the company was considering a $800 million borrowing deal at a rate of 1.7 percentage points over Treasurys. However, the offer fell through. Now, the same debt is being offered to investors at a higher rate, ranging from 2.2 to 2.50 points above comparable Treasury yields, for a nearly identical offering, according to sources familiar with the matter.
Both deals involve Blackstone's backing, the same company, and identical collateral, but for a significantly larger amount of money. The shift in sentiment and increased borrowing costs serve as a reminder of how swiftly investor sentiment can change. On Friday, the Financial Times reported that Blackstone informed investors it no longer anticipated Anthropic, a frontier AI lab, to achieve an investment-grade credit rating immediately following its IPO, contradicting earlier guidance.
Additionally, SpaceX's $40 billion debt issuance saw its pricing widen, with the riskier portion of the deal expecting an 8.75% yield, up from a previous discussion point.
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
