Banks try to offload the AI data-centre debt they just underwrote (opens the source in a new tab)
- JPMorgan, Morgan Stanley, SMBC and MUFG have explored risk transfers that pass the riskiest slice of AI data-centre loans to outside investors, as they near internal limits on AI exposure.
- A group including JPMorgan and MUFG has spent more than six months trying to place $38bn of construction debt for an Oracle-leased project in Texas and Wisconsin; some lenders will now sell at a discount.
- Oracle’s five-year default insurance reached about 151 Basis point One hundredth of a percentage point: 100 basis points = 1%. in early October, a level last seen in 2009, and order books for AI-linked bonds have shrunk since February.
- $38bn
- debt banks struggle to sell
- 151bp
- Oracle five-year CDS, early Oct
- 5.304%
- US 10-year yield this month
Why it matters When the lenders closest to the AI boom start trimming their own exposure, credit, not chips, may end up setting the pace of the build-out.
Other side Selling down risk can be routine balance-sheet housekeeping rather than distress, and capital is still flowing to data centres leased by investment-grade giants such as Microsoft and Google.