Nvidia raises $25B in first bond sale in five years

Nvidia ↗2.95% priced a $25 billion, seven-tranche bond offering Monday to fund AI chip production and refinance existing debt, according to Reuters.reuters
The deal, Nvidia’s first bond sale since 2021, was upsized from $20 billion after drawing about $85 billion in peak orders, per the Financial Times.ft
Goldman Sachs ↘0.23%, JPMorgan ↘2.47%, and Morgan Stanley ↘0.80% served as bookrunners for the offering.reuters

Nvidia Raises $25 Billion in First Bond Sale Since 2021

Nvidia on Monday priced a $25 billion corporate bond offering, its first foray into the debt markets in five years, as the chipmaker seeks to fund the capital-intensive buildout required to maintain its dominance in artificial intelligence hardware.

The deal was upsized from an initial target of at least $20 billion after drawing approximately $85 billion in orders at peak demand, making the offering more than three times oversubscribed, according to MT Newswires. The Financial Times reported the final size at $25 billion.goldsea

Structure and Pricing

The seven-tranche offering includes maturities ranging from two to 30 years, with the longest-dated notes maturing in 2056, according to a term sheet reviewed by Reuters. The bonds with the longest maturities were initially marketed at a spread of about 0.9 percentage points over U.S. Treasuries, though pricing tightened as investor demand surged.fidelity

Goldman Sachs, J.P. Morgan, and Morgan Stanley served as bookrunners for the transaction.reuters

Why Nvidia Is Borrowing

An Nvidia spokesperson told Reuters the proceeds are earmarked for general corporate purposes, including the repayment and refinancing of outstanding notes. The company last tapped the investment-grade bond market in June 2021, when it raised $5 billion.wtvbam

The decision to borrow comes despite Nvidia’s immense profitability. The company reported fiscal first-quarter 2027 revenue of $81.6 billion, up 85 percent year over year, and net profit of $58.3 billion. Alongside those results in May, the board authorized an additional $80 billion in share repurchases and raised the quarterly dividend 25-fold to $0.25 per share.tikr

Part of a Broader AI Debt Wave

Nvidia’s offering follows a broader pattern of technology companies tapping debt markets to finance AI infrastructure spending. Oracle raised $25 billion in a bond sale in February that drew record demand, and Bloomberg reported that Nvidia is joining what it described as an “AI debt boom”.bloombergtax

The sale tested investor appetite amid an environment of elevated long-term Treasury yields, with the 30-year yield having recently touched levels not seen since 2007.fintech