Goldman Sachs is sounding out investor interest for a roughly $1.15 billion junk bond that would finance construction of a data center leased to CoreWeave. The offering is expected to reach the market in September, although discussions remain fluid and plans could change. The data center, located near Richmond, Virginia, is being developed by American Real Estate Partners’ PowerHouse Data Centers and Chirisa Technology Parks. CoreWeave has supported billions of dollars in junk debt issuance by data center developers through long-term leases, but concerns around the company’s speculative grade credit rating have pushed borrowing costs above those attached to projects backed by major hyperscalers such as Alphabet. In contrast, Galaxy Digital paid a 10% yield on a $3.5 billion debt offering backed by a CoreWeave lease last month to attract investor demand. Goldman Sachs, CoreWeave, and Blue Owl did not immediately respond to Bloomberg’s requests for comment.
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