Kroll Bond Rating Agency assigned Anthropic a BB+ credit rating in June, though the information was disclosed in October. This rating is one level below investment grade, indicating higher credit risk for lenders. The assessment covers $4.4 billion in junior debt, which is part of a larger $35 billion AI chip financing agreement involving Broadcom.
The junior debt associated with Anthropic offers an annual yield of approximately 8.5 percent. In contrast, senior debt backed by Broadcom provides a yield of 5.75 percent. Investors typically require higher returns to compensate for the increased risk associated with lower-rated debt instruments.
Broader financial concerns are emerging as US government borrowing costs rise. In early October, the 10-year Treasury yield exceeded 5.3 percent, marking a 24-year high. This trend has prompted debates among investors regarding the stability of traditional 60/40 portfolios, which rely on bonds for risk mitigation.
Industry figures like Adam Back and Jeff Park are questioning traditional investment strategies in light of these yield trends. While Bitcoin advocates suggest using the cryptocurrency as a benchmark for returns, analysts like Willy Woo note that a Bitcoin-based economy could face challenges with debt repayment. Despite these concerns, bond ETFs continue to see record inflows.
