Are GPU Loans Safe From Rising Rates?

The Federal Reserve's recent rate hike and expectations of another have raised concerns about financing for AI data centers and chips. However, some floating-rate loans used by major GPU buyers, such as CoreWeave, include hedges that effectively convert much of their floating-rate exposure to fixed rates. This structure, known as delayed draw term loans, has been adopted by other companies like Iren and Nscale. The hedges are designed to mitigate the impact of rising benchmark rates for now.

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