Three things to think about:
- Morgan Stanley's AI debt banking lead
- Insurers awash in data decenter debt
- Data centers in space, again
1. Morgan Stanley's AI Debt Banking Lead
I have been asked a few times recently which banks are most active in AI financing, and I generally point to J.P. Morgan and Morgan Stanley. Perhaps, judging by new data, I should just point to the latter.
Highlights from a new report:
- Morgan Stanley has led/co-led ~$65B in AI and data-center bond issuance since October, more than any other major US bank.
- Its US IG bond-arranger share is up ~2 pp YoY, moving to #3.
- MS strategists are helping, projecting ~$3T in cloud/AI infrastructure spend by 2028, heavily debt-financed.
- It structured Meta’s $27B Hyperion SPV to keep obligations off Meta’s balance sheet
- MS designed the Google-backstopped junk deals for crypto miners TeraWulf and Cipher.
- Co-ran Meta’s $30B bond sale with record book size
- Convened energy, tech, and alternative-asset firms to align capital markets with AI-power constraints
- Merged energy + utilities coverage groups.
Morgan Stanley is trying very hard to be the AI capex debt financing lead of choice here. That apparently comes with offering unsettling rhetoric about how debt market innovation now outpaces that in equity markets. Here is its co-head of capital markets:
[T]he scale of innovation and creativity in the credit markets has dwarfed that of the equity markets.
For those of you, like me, who have been around this stuff for too long, innovation in debt markets is rarely something you want to see anyone bragging about. Ever.