Broadcom (AVGO) Stock Falls 3% as Credit Default Swaps Jump 28 Basis Points
TLDR
- Broadcom’s five-year credit default swaps jumped 28 basis points in August, outpacing peers like Oracle and SpaceX.
- Yields on Broadcom’s 5.15% bonds due in 2031 rose about 14 basis points in August.
- Broadcom is in talks to backstop part of a $60+ billion AI financing package for customers including Anthropic.
- Earlier this year, Broadcom backed most of a $35 billion deal alongside Apollo and Blackstone.
- JPMorgan strategist Tarek Hamid flagged these guarantees as “phantom leverage,” warning hidden AI debt obligations could reach trillions.
Broadcom (AVGO) stock fell 2.6% on Monday as bond markets flashed growing concern over the chipmaker’s expanding role in financing AI infrastructure deals.
Yields on Broadcom’s 5.15% bonds due in 2031 rose roughly 14 basis points in August. Its five-year credit default swaps, which function as insurance against a debt default, jumped 28 basis points over the same period. That move was larger than what was seen at Oracle or SpaceX.
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