Oversubscribed by more than three times! NVIDIA plans to issue investment-grade bonds to raise $250 million.
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According to Bloomberg, Nvidia plans to raise $25 billion through the issuance of senior bonds. At its subscription peak, the bond offering attracted about $85 billion in orders, highlighting investors' persistent and intense interest in participating in the artificial intelligence boom.
Previous reports indicated that Nvidia planned to raise at least $20 billion through the issuance of high-grade bonds. The latest report adds $5 billion more.
Currently, tech giants including Google's parent company Alphabet and Amazon are flocking to the debt market, issuing hundreds of billions of dollars in bonds to build data centers and other infrastructure needed for the rapid expansion of artificial intelligence. Nvidia has joined this trend. So far, investor willingness to take on these new bonds has been very strong.
Nvidia has become the cornerstone of the AI ecosystem and has soared to become the world's largest company by market value. Nvidia is currently investing heavily in enterprises that help expand AI demand. Investments include $5 billion in Intel, $10 billion in Anthropic PBC, and $30 billion in OpenAI. Meanwhile, Nvidia is also increasing returns to its shareholders.
Another insider said that this bond issuance by Nvidia is divided into seven tranches, with maturities ranging from 2 to 30 years. This is Nvidia's first bond issuance in five years, and its size is expected to be at least four times that of its previous two issuances in 2020 and 2021.
According to another insider, the yield on the longest-term bond has narrowed by 0.25 percentage points from the initial price guidance, with the final premium set at 0.65 percentage points above U.S. Treasuries. The insider added that, aside from other uses, the funds raised will also be used to refinance existing debt.
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