AI Infra Dispatch: AI Infrastructure Financing More Selective, Not Closed, After Rocky Month, Says Oak Hill Partner Leveto

Editor’s Note: The AI Infra Dispatch is a new round-up of Octus’ proprietary AI infrastructure coverage. We include market commentary and analysis as well as the top stories from each region. To subscribe, click HERE and Add to Watchlist.
 

Financiers of the AI infrastructure boom often acknowledge a compression of credit cycles relative to traditional financing. That volatility was apparent in the past month with a crosscurrent of landmark financings and mounting impediments to the digital infrastructure boom.

At the end of October, SpaceX set the record for the largest ever debt financing for compute spend, announcing a $40 billion raise “for SpaceX’s terrestrial compute buildout” which will use Nvidia chips and is being led by Apollo and Goldman Sachs, only to have Broadcom surpass its debt raise hours later. Bank of America, Blackstone, Citi and Morgan Stanley announced they had raised $63 billion in debt financing to purchase “Broadcom XPU AI accelerators and networking solutions to be leased to Anthropic.” Anthropic filed its amended IPO registration this week, before a transaction which could value the business at up to $1.5 trillion.

Then last week, American voters rebuked data center development across several localities in midterm elections. Gubernatorial candidates supporting stricter regulations for data centers won in key states, while at least 42 jurisdictions approved measures to ban or restrict development. The NASDAQ plummeted on fears of a slowdown in AI development and ramifications from a scandal engulfing the Nvidia CEO Jensen Huang have only begun.

Despite the volatility, investors remain cautiously optimistic for digital infrastructure financing opportunities. In the current market environment, “selectivity matters more than ever,” noted Greg Leveto, partner and portfolio manager at Oak Hill Advisors, as investors differentiate between speculative AI exposure and hyperscaler-backed infrastructure.

“A more uncertain environment may create opportunities for lenders like us to play some offense,” Leveto added. “There are emerging opportunities to enter existing projects at attractive prices, help others that are overexposed trim their risk and provide capital solutions for worthy borrowers.”

The U.S. midterm results also present a challenge to development, with greater uncertainty around permitting, incentives and development timelines, leaving fully permitted power and data centers possibly more valuable as barriers to new supply increase. Oak Hill, Leveto noted, is focused on financing assets with secured power, permits in place and access to critical equipment.

Oak Hill remains cautiously constructive on the financing picture for data centers. Power availability, construction and permitting remain constraints to growth, Leveto noted, yet “hyperscalers still support most of the investment needed in some way and there are many bankable projects.” For now, the market will embark on price discovery and question long-term allocations, but a deep financing market remains for the right assets.

One possible winner of data center backlash in the U.S.: European developers. European data center financing momentum has held up over the past month, with banks and private lenders both active in the run up to year-end. Notably, two themes stand out. First, Scandinavia and the U.K. are deepening their ties, as VodafoneThree looks to explore a new UK-Norway digital corridor, and Norway is also central to Volta’s $5 billion financing, which backs a letter of credit for a Norwegian data center lease.

Second, lenders at SuperReturn Amsterdam said Spain and Italy are gaining momentum last week. Zegona has hired Guggenheim to sell Vodafone Spain’s data centers, and Prysmian has completed its acquisition of U.K.-based subsea specialist Xtera.
 

• A $500 million BWIC holding first lien data center loans was shown to investors after U.S. midterms. Commitments on the package are due Nov. 19.
• A high yield refinancing of Nexus’ $15 billion bridge loan was delayed to at least January 2027 over Texas’ moratorium, scrutiny over grid usage.
• Citi is in talks to lead a $2B financing supporting GPU purchases for Argentum AI. The debt is backed by signed take or pay contracts.
• Private credit is stepping in to fund early power commitments for AI Infrastructure buildout.
• Coreweave’s CDS spreads traded at an all time high in late October following investors’ concerns over access to capital. Oracle’s CDS spreads also widen relative to IG peers.
• Character.ai’s Chapter 11 sale drew objections from U.S. Trustee, 32 state attorneys over Disney stalking horse bid for IP assets.
   

• Snowhawk, Nuveen ready bid for Oaktree’s Pure DC minority stake.
• PGIM negotiates AI infrastructure exposure limits in European CLO reset, priced by Permira.
• Centerview mandated to lead the sale of EdgeConneX yieldco.
• Zegona mandates Guggenheim to sell Vodafone Spain data centers.
• Centerview runs EdgeConneX yieldco sale; second-round bids underway.
• Echelon Data Centres preps sale, contingent on Chinese hyperscaler deal.

• Zankore launches a $3.1 billion five-year underwritten GPU loan, into senior syndication.
• Blackstone-backed Neysa, raised about 43.5 billion Indian rupees ($460 million) in loans from Union Bank of India to buy GPUs.
• Private equity-backed pan-Asia data center provider Princeton Digital is mulling a restart on a second accordion to further upsize its $750 million holdco loan.
• PaleBlueDot AI is close to closing a $600 million, 40-month GPU loan.
• Firmus shelved a planned debut $3 billion-$5 billion dollar bond and loan, part of a $10 billion GPU financing.
• NEXTDC halted trading, cut FY’27 net revenue guidance on delays to installing power at its M3 Melbourne data center.
   

• Sahar Kamali joins Kirkland & Ellis from Blue Owl.
• Phil Adam has joined PwC’s Infrastructure debt advisory team.
• Moe Kelley and Brian Bagenstose have joined FTI Consulting’s TMT practice.