Anthropic offers Blackstone yields above 10% in $60B Project North Star chip-financing deal reported on Oct 17
FT reported Anthropic is offering Blackstone 10% coupon in the $60B Project North Star chip financing, funding acquisition of ~1.5 GW of Google TPUs.
On October 17, the Financial Times reported that Anthropic is offering Blackstone-managed funds a coupon of more than 10% in a $60B chip-financing deal codenamed Project North Star. Blackstone-managed funds will invest approximately $9B in junior debt, half of the planned $18B junior financing, with repayment backed by Anthropic's five-year chip lease payments.
The 10% coupon is reported to deliver higher total returns after issuance discounts and fees; ICE BofA BB US High Yield index shows similarly rated borrowers typically pay around 7% in public bond markets. The remaining $9B in junior debt will be offered to other investors in coming months at potentially lower yields. The financing package also includes ~$42B in senior debt guaranteed by Broadcom, which collaborates with Google on chip development. Funds will be fully drawn by 2027, after which the debt can trade in the institutional 144A bond market.
Project North Star is similar in structure to Anthropic's Project Big Sky from four months ago — which issued ~$4.4B junior debt at 8.5%. The higher cost reflects investor demands for risk premium on tech firms' AI infrastructure capital expenditures and debt, as well as Anthropic's challenge in seeking investment-grade status. KBRA gave Anthropic a rating one notch below investment grade in June; the new junior debt is expected to receive a similar assessment.
Blackstone declined to comment; Anthropic did not respond to a comment request.Project North Star is similar in structure to Anthropic's Project Big Sky from four months ago — which issued ~$4.4B junior debt at 8.5%. The higher cost reflects investor demands for risk premium on tech firms' AI infrastructure capital expenditures and debt, as well as Anthropic's challenge in seeking investment-grade status. KBRA gave Anthropic a rating one notch below investment grade in June; the new junior debt is expected to receive a similar assessment.
Blackstone declined to comment; Anthropic did not respond to a comment request.