Broadcom CDS Rises 28bp Amid AI Financial Structure Controversy

Broadcom's 5-year credit default swap (CDS) premium rose by 28 basis points in August. The yield on the 5.15% corporate bonds maturing in 2031 also increased by about 14 basis points, reflecting the AI semiconductor financial structure in the bond market. Market participants are factoring in the credit burdens associated with Broadcom's AI financial package. On June 9, Broadcom established an AI XPV platform with Apollo and Blackstone, planning to build over 20GW of computing capacity by 2028. Initial funding will be used for the expansion of Anthropic's computing infrastructure of over 1GW. According to reports on August 20, Broadcom is discussing ways to raise over $60 billion for AI chip financial transactions. The total package has been mentioned to be up to $100 billion, but this is categorized as the upper limit of the financial structure currently under negotiation, not confirmed debt. In its 10-Q submitted to the SEC, Broadcom described a 5-year backstop agreement, stating that the maximum exposure is $29 billion. Bank of America downgraded Broadcom's bond rating outlook due to uncertainties surrounding the XPV platform. Broadcom reported that its revenue for the second quarter of fiscal year 2026 was $22.187 billion, a 48% increase year-over-year. AI semiconductor revenue reached $10.8 billion, a 143% increase.

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