Massive leveraged buyouts, surging risky debt, and early signs of subprime consumers falling behind signal mounting financial strains

Massive leveraged buyouts, surging risky debt, and early signs of subprime consumers falling behind signal mounting financial strains

TeraWulf Inc. (WULF), a data center company, is planning to raise approximately $3 billion through debt financing to expand its data center infrastructure, according to a report by Bloomberg. The debt is expected to be raised via a structure backed by Alphabet Inc.'s (GOOGL, GOOG) Google, with Morgan Stanley (MS) arranging the potential transaction. The deal could debut as early as October in the leveraged loan or high-yield bond markets.

Patrick Fleury, TeraWulf's Chief Financial Officer, stated that Google is slated to backstop the transaction, which could help it secure a higher credit rating. This move is likely driven by the strong demand for AI data-center capacity, GPUs, and power. Credit rating agencies are currently assessing the transaction's potential rating.

The debt financing plan comes amidst growing concerns about massive leveraged buyouts, surging risky debt, and early signs of subprime consumers falling behind. These trends signal mounting financial strains, as investors and financial professionals closely monitor the impact of such activities on the broader economy.

TeraWulf and Google have not yet responded to requests for comment from MT Newswires.

https://finance.yahoo.com/news/market-chatter-terawulf-eyes-3-183440044.html