PremiumWhen Goldman & JPM Won't Hold It, Should You? The 11% AI Chip Loan Banks Refused To Underwrite
When the two biggest investment banks on Wall Street agree to lead a $5 billion AI loan but won't put their own balance sheets behind three-quarters of it, the message isn't hard to read.
According to Bloomberg, JPMorgan (JPM) and Goldman Sachs (GS) have taken "a rare move to limit their exposure" on a $5 billion loan sale for Volta Infrastructure Holdings, a neocloud founded earlier this year. The banks have underwritten only a $1.3 billion term loan, while the $3.7 billion chip loan is not underwritten at all, "a move to protect themselves from potential risks," people familiar told Bloomberg. The whole package is being pitched at around 11%, which Bloomberg calls "one of the highest borrowing costs seen in the leveraged loan market that's become popular for financing AI."