Private credit ·
Moody's: AI infrastructure borrowing is widening private credit, while 2027-2029 maturities test weaker borrowers
Reuters reports that Moody's Ratings said on Oct. 27 that AI financing needs now extend beyond data-center construction to land, power, semiconductors, GPUs and TPUs, pulling private credit beyond traditional corporate lending. Moody's expects capital spending by the five largest US hyperscalers and CoreWeave to reach nearly $1 trillion in 2027, financed through cash flows, debt, joint ventures and special-purpose vehicles. It said a wave of loans coming due between 2027 and 2029 will test weaker borrowers' ability to refinance at higher rates, that about 17% of the 607 borrowers it tracks used payment-in-kind interest, and it flagged 'circular' financing risk where technology companies, chipmakers and AI developers invest in, lend to and buy from one another. Moody's scheduled its Private Credit Quarterly webinar on these themes for Oct. 28.
Why it matters for deal teams: Two monitoring jobs in one note: track 2027-2029 refinancing need alongside PIK use in your own book, and map exposure to AI-infrastructure counterparties that may weaken together.
Source: Reuters report on Moody's Ratings research, syndicated by The Economic Times ↗ · more ↗