Broadcom CDS surges to record 122 basis points amid massive off-balance-sheet AI chip debt deal

Broadcom just pulled off one of the most audacious financing moves in tech history, and the credit market’s response was immediate and unflattering. The company’s credit default swap spread, essentially the price investors pay to insure against Broadcom defaulting on its debt, spiked to a record 122 basis points following the announcement of a colossal off-balance-sheet debt structure that could reach roughly $100 billion in total borrowing capacity. The deal, first reported by Bloomberg on August 20, involves Broadcom negotiating over $60 billion in senior secured debt channeled through special-purpose vehicles. On top of that sits an additional junior tranche of approximately $30 billion. The purpose: purchasing and leasing custom AI chips to major customers, including Anthropic. The architecture of a $100 billion debt machine Broadcom is using SPVs to keep this mountain of debt off its own balance sheet. The senior-secured tranche of $60 to $70 billion comes with partial guarantees from Broadcom itself. The junior tranche of roughly $30 billion sits in the SPVs without the same level of backing. The transaction builds on a partnership Broadcom struck in June 2026 with Apollo Glo...