SpaceX seeks $40B in Apollo-led deal to buy Nvidia chips, FT reports

• Elon Musk’s SpaceX (SPCX) is reportedly looking to raise $40B in a financing effort led by Apollo Global Management (APO) to purchase Nvidia (NVDA) chips as the AI and rocket group amplifies its bet on the chipmaker’s advanced technology.
• The company is seeking to raise about $10B in bank loans and $30B in investment-grade debt to fund its blockbuster chip order, the Financial Times reported.
• Private capital group Apollo is expected to lead the deal and help sell the debt to a broad base of investors. Bond group Pimco was among a small group of lenders in talks to fund the deal, the report said.
• The transaction is expected to close in 2027.
• Insurance and pension funds would be able to buy SpaceX’s (SPCX) debt due to its BBB credit rating, the second-lowest investment-grade ranking, the FT report said. Such funds take much more limited positions in junk-rated notes.
• SpaceX secured an investment-grade rating shortly after its $86B initial public offering in June. It sold $25B in high-grade bonds less than two weeks later. However, the bonds sold off in the following days due to concerns over its mounting debt and heavy capital expenditure.

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