Morgan Stanley Leads Record $5.7B AI-Backed Junk Bond at 6.25% Yield
Morgan Stanley led a $5.7 billion US dollar high-yield bond sale, the largest AI-linked offering by a single bookrunner, funding construction of two Indiana data centers leased to Fluidstack and backstopped by Google. The bonds priced at par to yield 6.25% after attracting $19 billion in investor orders.
1. Record AI-Linked Bond Offering
Morgan Stanley acted as sole bookrunner for a $5.7 billion high-yield bond issuance by Meridian Arc HoldCo LLC, marking the largest US dollar junk debt tied to artificial intelligence. The special-purpose JV will use proceeds to build two data centers in Sullivan County, Indiana, under lease to Fluidstack and backed by Google.
2. Pricing and Investor Demand
The bonds were priced at par with a 6.25% yield at the tight end of guidance, closing just one day after marketing began. The offering drew $19 billion of orders, underscoring strong investor appetite for AI infrastructure financing.
3. Strategic Impact for Morgan Stanley
This transaction surpasses Morgan Stanley’s prior $3.2 billion sole-led high-yield deal and reinforces its leadership in AI-related debt underwriting. The successful sale is expected to bolster the firm’s investment-banking fee income and market positioning in technology financing.