Anthropic's need for capital is growing. Will it receive an investment rating?

Anthropic warned investors that it may need to raise additional funding sooner than expected. However, as Bloomberg noted, the company provided almost no details in its IPO prospectus about how it plans to obtain an investment-grade rating.

The developer of the Claude chatbot is facing rapidly growing capital needs amid competition with OpenAI. Obtaining an investment-grade rating would open the door to a wider range of institutional bond buyers—insurance companies and pension funds—and allow the company to borrow at lower costs.

According to the prospectus, as of June 30, Anthropic’s current debt totaled $6.2 billion in the form of convertible notes issued to Amazon—an instrument that can be exchanged for the company’s shares instead of being redeemed for cash.

In addition, the documents reveal details of a five-year, $15 billion revolving credit facility provided in September by a group of banks led by Morgan Stanley: the amount has increased from the approximately $3 billion previously agreed upon. The deal includes guarantees and collateral that will be released if Anthropic receives an investment-grade rating from at least two of the three major agencies. Moody’s, S&P, and Fitch have not yet published their ratings.

The interest rate on the credit line will depend on the assigned rating—ranging from 0.75 percentage points above the base rate for an A rating to 1.25 percentage points for a BBB- rating, the lowest investment-grade rating. A spokesperson for Anthropic did not respond to a request for comment from Bloomberg.

“Anthropic’s situation is as follows: the company has very high liquidity and enormous future obligations,” explained Tony Tschinka, manager of the investment-grade securities portfolio at Impax Asset Management. “Given its current debt burden, the company’s balance sheet warrants an investment-grade rating. However, the final rating will depend on how the agencies view its repayment schedule, short operating history, and interdependent relationships with counterparties.”

Anthropic currently relies on Broadcom, which acts as a guarantor for transactions in which a separate corporate entity borrows funds to purchase chips and then leases them to Anthropic. The first such deal, dubbed Big Sky, raised $35 billion. On October 26, Broadcom announced a new $63 billion deal to finance the purchase of chips, which will also be leased to Anthropic.

In addition, Anthropic still has the option to raise another $77 billion through convertible notes from Amazon, Broadcom, and Google (a subsidiary of Alphabet).

At the same time, commitments for leases that have not yet begun—primarily for computing power and infrastructure—rose to $321 billion as of the end of June, compared with about $50 billion as of the end of December. Such a significant volume of liabilities makes Anthropic’s future credit rating increasingly important, Bloomberg emphasizes.

SpaceX serves as an example of how a technology company that has only recently gone public can rapidly transition to the high-grade debt market. While preparing for its IPO this year, Elon Musk’s company announced its goal of “maintaining an investment-grade rating” and quickly received one from Moody’s, S&P, and Fitch. In June, a week and a half after the IPO, SpaceX issued $25 billion in investment-grade bonds—the securities immediately plummeted in price, surprising creditors. Bond buyers expect Anthropic to present a similar plan, Bloomberg notes.

This article was AI-translated and verified by a human editor