Broadcom credit risk measures rise amid AI financing deals

Investing.com -- Bond traders increased credit risk measures for Broadcom Inc. as the company provides financial support for large AI-related financing packages.

Yields on Broadcom's 5.15% bonds maturing in 2031 climbed approximately 14 basis points in August. The company's five-year credit default swap prices rose 28 basis points during the same period, exceeding increases seen at Oracle Corp. and SpaceX.

Broadcom is discussing plans to secure more than $60 billion in debt for an AI chip financing arrangement expected to support Anthropic PBC and other firms. The company may guarantee part of a senior-secured portion of the deal, which remains under negotiation.

Earlier this year, Broadcom agreed to backstop most of a $35 billion debt package. Investors including Apollo Global Management Inc. and Blackstone Inc. financed the purchase of custom AI chips for lease to Anthropic.

Chipmakers such as Broadcom and Nvidia Corp. have increasingly used guarantees and other financial support mechanisms in 2026 as technology companies spend billions to expand cloud-computing infrastructure. These arrangements allow chipmakers to extend their balance sheet strength to clients, increasing their purchasing capacity.

Concerns have emerged that these commitments create risks not reflected on company balance sheets. An industry downturn could require these firms to fulfill billions in pledges during periods when their own earnings face pressure.

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