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Interview

GS’ Zach Ablon on how hyperscalers are also turning to the high yield markets for financing

  • 17 out of 23 data center joint venture deals are currently trading at yields significantly wider than their originated levels.
  • Chip financing is projected to exhibit a shorter duration compared to existing investment-grade data center financing.
  • High yield markets, specifically the double B universe, are expected to mirror recent market indigestion observed in the investment-grade sector.
  • New data center deals entering the high yield space are anticipated to trade at spreads substantially exceeding the 165 basis point level recorded on Friday.
  • Concerns persist regarding the valuation of the double B universe, which is currently characterized as significantly rich.