Banks prepare to sell $15bn of Anthropic data-centre debt into the bond market

Banks that arranged $15 billion of debt for an Anthropic data centre plan to remove much of it from their balance sheets through a bond sale, the Financial Times reported. That would free lending capacity at a time when artificial-intelligence financings are approaching the limits of what banks can hold.

The package itself was assembled last week. Morgan Stanley leads a group providing a $14 billion bridge loan plus a revolving credit facility for a campus in Hubbard, Texas, Bloomberg reported. The site includes a natural-gas power plant capable of 1.6 gigawatts and will run chips co-designed by Google and Broadcom. Google receives roughly a 20% equity interest and has committed to cover lease and power obligations if Anthropic fails to pay, according to reporting compiled by Yahoo Finance. Anthropic separately secured a financing package worth about $35 billion earlier this year to buy Google's proprietary tensor processing units.

The relevant risk here is credit, not technology. The borrower is a private company with negative free cash flow. The entity whose balance sheet actually supports the paper is Google. Investors buying these bonds will be taking Google credit exposure at a spread that reflects an artificial-intelligence project, which is precisely the kind of mispricing that builds when capital is plentiful and the underlying demand forecast is untested.

The structure also shows how the buildout is being funded. Equity issuance and retained earnings paid for the first phase of the artificial-intelligence capital expenditure cycle. Bridge loans, private credit and now public bonds are paying for the current one. Each step moves the risk further from the firms doing the spending and closer to fixed-income investors who cannot easily verify the utilisation assumptions behind a gigawatt-scale campus.