CoreWeave, Oracle Face Rising Debt Costs as 10-Year Nears 5.17%

The 10-year Treasury yield is sitting near 5.17%, up about a percentage point since the start of the year and, per CNBC, at its highest levels since 2007. "Companies issuing debt are going to have to offer more attractive rates of return to lure investors," the outlet reports, and the AI infrastructure buildout is where that bill is landing hardest.

CoreWeave spells the sensitivity out in its own filings. Every 100-basis-point increase in rates "could result in a $30 million jump in its interest expense" based on its outstanding floating rate debt as of June, according to its SEC disclosures. Shares in the debt-heavy company have still risen almost 8% this week. Oracle, which has counted on the debt market for its AI expansion, has fallen 7% for the week and about 30% for the year. Oracle's quarterly interest expense climbed 55% from a year earlier to $1.43 billion.

The new deals coming to market are pricing at levels that make the strain visible. Japan's SoftBank raised $11.1 billion in a junk-bond sale this week, with yields as high as 9.75% for the seven-year tranche. A data center developer sponsored by affiliates of Blue Owl Capital raised $1.1 billion for a CoreWeave-tied project, with five-year notes priced to yield 9.25%, roughly 2.7 percentage points above the average yield for similarly-rated debt tracked by Bloomberg.

Sitting behind it all is JPMorgan Chase's June estimate that $4.1 trillion in AI-related debt will be issued through 2030. That is the pipeline these yields are now grinding against. Oracle's stress is already visible at the project level, with the company recently sending a force majeure notice tied to its New Mexico Project Jupiter campus, part of a run of Oracle financing stories we have been tracking.