Nvidia's $25B bond sale draws $85B in orders, tripling debt
Nvidia upsizes bond offering to $25B after $85B in orders, first since 2021.
Nvidia raised $25 billion in a seven-part investment-grade bond offering on Monday, its first debt sale since 2021. The deal was upsized from $20 billion after attracting over $85 billion in orders, allowing the company to tighten the 10-year spread to 0.5 percentage points above US Treasuries, down from the initially discussed 0.75 points. Proceeds will be used for general corporate purposes, including refinancing outstanding notes. The issuance more than triples Nvidia's outstanding debt to roughly $30 billion from $8.5 billion, yet the company retains a double-A credit rating — the third-highest tier — and generated $96.6 billion in free cash flow over the past year, up 59%.
The bond sale comes amid a broader tech funding frenzy as companies race to secure capital for AI infrastructure. Nvidia, the main beneficiary of Big Tech's trillion-dollar AI spending spree, has also invested over $90 billion in AI developers like OpenAI, Anthropic, and xAI, as well as suppliers and cloud builders. These circular financial relationships have raised concerns among bond investors about concentrated risk — if one player in the ecosystem falters, it could cascade. Despite a recent dip in Nvidia's market cap below $5 trillion, the strong demand for its bonds underscores continued investor confidence in the AI sector's long-term growth.
- Nvidia upsized its bond offering to $25B from $20B after receiving over $85B in orders.
- The deal is its first bond sale in five years and triples outstanding debt to roughly $30B.
- Proceeds are for general corporate purposes and refinancing; Nvidia maintains a double-A credit rating.
Why It Matters
Nvidia's bond success signals strong investor confidence in AI infrastructure spending despite market volatility.