Morgan Stanley Helps Finance $999M Data-Center Bonds at 9% Yield
Morgan Stanley anchored a $999 million junk bond issuance priced at roughly 9% yield for a SoftBank-leased 50-megawatt Texas data center. Proceeds fund a 15-year leased Austin facility with rent backstop guarantees starting in December, highlighting demand for high-yield financing in AI infrastructure.
1. Bond Issuance Details
SE Cosmos LLC sold $999 million of five-year junk bonds at approximately a 9% yield to fund a 50-megawatt data center in Austin, Texas. The facility is fully leased to a SoftBank subsidiary under a 15-year contract and includes lease rent backstop dates ensuring cash flow by December regardless of construction status.
2. Underwriting and Market Impact
Morgan Stanley, alongside Nomura, led the deal, capturing fees in a data center finance segment that has raised $28 billion of high-yield bonds this year. The pricing marks the highest borrowing cost for such a deal to date, reflecting investor scrutiny of AI infrastructure spending while underscoring ongoing demand for riskier debt issuance.