$CRWV is up over 20% today. CoreWeave is leaning harder on customer prepayments and on loans backed by investment-grade customers, and says it won’t issue more unsecured debt through 2027.
Most mid-sized neoclouds don’t have investment-grade customers to borrow against. With lenders pulling back, they need customers to prepay more of each cluster, and those prepayments are paid for out of venture rounds, the most expensive money in the deal.
That is the gap we finance. Last month we arranged a bridge facility that let a neocloud pay for its GPUs before delivery, months before its term lenders would fund.
Most mid-sized neoclouds don’t have investment-grade customers to borrow against. With lenders pulling back, they need customers to prepay more of each cluster, and those prepayments are paid for out of venture rounds, the most expensive money in the deal.
That is the gap we finance. Last month we arranged a bridge facility that let a neocloud pay for its GPUs before delivery, months before its term lenders would fund.
CoreWeave $CRWV is leaning harder on customer prepayments and returning to IG offtake for its next DDTL because public credit got flooded with supply and drew the line. That's as much a sign of compute's first credit cycle as it is a "broken" market.View quoted post on X
In these cycles, the financing burden shifts to whoever can carry it. At the top of the mkt that's IG balance sheets, who have access to some of the world's cheapest capital. In the middle market it's actually venture rounds, the most expensive, carrying this through prepayments as lenders take a step back/have re-racked levels wider.
This actually makes inference company raises, not neocloud spreads, the signal to watch in the medium term. As long as those keep getting done, customers keep paying and lenders get comfortable funding more of each cluster again. Over time, prepays come back down and cheaper capital finds its way back to the good operators. Same path every financed asset class takes.
