CoreWeave shares soar 19% after $2 billion debt offering

CoreWeave shares popped 19% after announcing a $2 billion debt offering.

The renter of artificial intelligence data centers powered by Nvidia chips said it had priced the notes at 9.25%, with a June 2030 maturity date. The deal represents a $500 million increase from its initial announcement.

CoreWeave said it plans to use the capital to pay off outstanding debt. The company confirmed to CNBC that the debt offering was five times oversubscribed.

In its first-quarter earnings report last week, CoreWeave said that it raised a total of $17.2 billion in equity and debt “to support its strategy to drive the next generation of cloud computing for the future of AI.” The company topped revenues expectations but posted wider-than-expected net loss and said it plans to spend big on capital expenditures to support infrastructure demand.

During an interview with CNBC’s “Squawk on the Street” last week, CEO Michael Intrator defended CoreWeave’s spending plans after some investors cast doubt on its debt, and demand durability. He said the company is meeting “demand signals” from some of its major clients.

In a call with analysts, CoreWeave said it has no debt maturities until 2028 other than payments related to vendor financing and “self-amortizing debt through committed contract payments.” The company said it had about $3.8 billion in current debt and $4.9 billion in non-current debt at the end of the quarter.

A year ago, CoreWeave announced that it had raised $7.5 billion in debt, led by Blackstone and Magnetar, to more heavily invest in its cloud data centers. CoreWeave said in its IPO prospectus that it was “one of the largest private debt financings in history and signals the confidence that debt investors have in funding our company to build and scale the next generation AI cloud.”

CoreWeave counts Nvidia and Microsoft among its biggest customers and has signed two seperate deals with OpenAI, totaling nearly $16 billion.