{
  "id": 10963455,
  "title": "Analysis:AI borrowers face tough sell in risky corners of US credit market",
  "url": "https://urgent.news/2026/09/30/analysis-ai-borrowers-face-tough-sell-in-risky-corners-of-us-credit-10963455",
  "topic": "ai",
  "section": "AI",
  "published": "2026-09-30T14:34:47.000Z",
  "source": {
    "name": "CNA - Business",
    "slug": "cna-business",
    "url": "https://www.channelnewsasia.com/business/analysisai-borrowers-face-tough-sell-in-risky-corners-us-credit-market-6422016"
  },
  "original_language": "en",
  "account": "The artificial intelligence boom has reached the riskiest corners of US credit markets, with leery lenders demanding higher compensation to fund borrowers whose future earnings are largely unproven. This trend resulted in $88 billion of AI-related issuance by low-rated firms in 2025, with most borrowing occurring in the US. In the first 11 months of 2025, AI-related issuance in leveraged finance totaled $20 billion, according to analysts using Neuberger Berman data.\n\nInvestors are scrutinizing these less-established borrowers, questioning their revenue projections, collateral value, and debt support capabilities. Higher-rated AI issuers have been borrowing heavily, while selloffs in Treasury markets are pushing yields up across the board. High-yield investors require detailed information about cash flow, timing, and the likelihood of that cash flow materializing, according to Larry Holzenthaler, senior portfolio manager at Catalyst Funds.\n\nDespite rising issuance, risk appetite for AI-related credit remains subdued. Leveraged finance buyers have focused on higher-quality borrowers, preferring double-B-rated companies that are just below investment grade. Demand remains strongest for issuers with predictable revenue streams, long-term contracts, tangible assets, and established customer bases.\n\nData centers, which typically fall into the higher-quality category, have been driving much of the activity in the high-yield market, now amounting to $40 billion in AI infrastructure supply this year, compared to $12 billion for all of 2025. AI companies are unlikely to push far down the credit spectrum due to higher borrowing costs. Even near-investment-grade AI issuers are paying yields of 9% to 10%, while lower-rated borrowers could face costs of up to 14% to 15%.\n\nBorrowers in the AI space face heightened scrutiny from a more skeptical investor base. Unlike investment-grade investors, high-yield buyers are more constrained by factors such as portfolio rules limiting exposure to riskier borrowers. Debt issuers must provide proof that revenues will eventually support the debt being raised, highlighting the increased scrutiny faced by AI-linked issuers as borrowing moves further down the quality spectrum.",
  "summary": null,
  "key_points": [
    "AI boom reaches riskiest US credit markets",
    "$88 billion AI-related issuance by low-rated firms in 2025",
    "High-yield investors demand detailed cash flow information"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 3,
    "also_reported_by": [
      {
        "outlet": "Investing.com",
        "title": "Analysis-AI borrowers face tough sell in risky corners of US credit market",
        "url": "https://urgent.news/2026/09/30/analysis-ai-borrowers-face-tough-sell-in-risky-corners-of-us-credit",
        "published": "2026-09-30T14:33:03.000Z"
      },
      {
        "outlet": "Channel News Asia",
        "title": "Analysis:AI borrowers face tough sell in risky corners of US credit market",
        "url": "https://urgent.news/2026/09/30/analysis-ai-borrowers-face-tough-sell-in-risky-corners-of-us-credit-10968633",
        "published": "2026-09-30T14:34:47.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}