NVIDIA has completed a $25 billion high-grade bond offering, which attracted $85 billion in investor orders. The final issuance size was increased from an initial target of approximately $20 billion to $25 billion. The longest-dated tranche saw its yield tighten by 25 basis points from initial price guidance and was ultimately priced at a spread of 65 basis points over U.S. Treasuries.
$NVIDIA (NVDA.US)$ It has completed a $25 billion high-grade bond offering, joining the ranks of tech giants rushing to tap the bond market—a move that once again underscores investors’ enthusiasm for the artificial intelligence wave in the debt markets.
According to Bloomberg, citing people familiar with the matter, demand for the bond reached as high as USD 85 billion—more than three times the final issuance size—and the offering was upsized from an initial target of approximately USD 20 billion to USD 25 billion. This marks NVIDIA’s first bond issuance since 2021.
The offering comes amid heightened sentiment in the investment-grade bond market. A U.S.-Iran agreement ending their conflict has bolstered the bond market, driving investment-grade credit spreads down to their lowest levels since early February, before the conflict erupted.
In a client report, Robert Schiffman, analyst at Bloomberg Intelligence, noted that relatively inexpensive long-term debt financing helps lower NVIDIA’s weighted average cost of capital and provides funding for its strategic investments in artificial intelligence without compromising its AA credit rating.
Orders exceeded supply by threefold, prompting an increase in issuance size
The bonds were priced on Monday, with NVIDIA issuing notes across seven tranches maturing between two and thirty years. According to sources familiar with the matter, the spread over U.S. Treasuries for the longest-dated tranche narrowed by 25 basis points to 65 basis points amid strong investor demand. Proceeds will be used for purposes including repayment of existing debt.
The transaction was executed via a 'quick-build' book-building process, bypassing the customary investor roadshows typically conducted prior to investment-grade bond offerings. Andy Li, analyst at CreditSights, stated:
"Their decision to pursue a fast execution doesn’t surprise me. NVIDIA holds a dominant position both in the market and financially, and doesn’t need to aggressively market itself to investors."
Tech giants rush to issue debt amid AI infrastructure financing boom
NVIDIA’s offering exemplifies the broader trend of technology companies tapping capital markets to fund intensive AI infrastructure investments. So far this year, Meta and Oracle have each issued USD 25 billion in bonds, Alphabet raised USD 20 billion, and Amazon’s single issuance reached USD 37 billion—the largest investment-grade bond deal in the U.S. market this year.
Within the AI ecosystem, NVIDIA, as a chip supplier, is also actively expanding its presence across the upstream and downstream segments. The company has invested $5 billion to acquire a stake in Intel, committed up to $10 billion to Anthropic PBC, and contributed $30 billion to OpenAI’s large-scale funding round. Meanwhile, NVIDIA is also significantly increasing its returns to shareholders.
According to the average analyst forecast compiled by Bloomberg, NVIDIA is expected to generate over $200 billion in free cash flow in the fiscal year ending January 31, 2026, with its robust profitability providing strong support for its bond creditworthiness.
Favorable bond market conditions with narrowing credit spreads
This bond issuance comes at a time when credit spreads in the bond market are near historic lows. The U.S.-Iran agreement has bolstered risk sentiment, driving risk premiums on investment-grade bonds back down to levels seen before the earlier conflict this year, fueling a surge in borrowing activity across the credit market.
Despite months of ongoing hostilities, U.S. high-grade bond funds have recorded net inflows for 13 consecutive months—according to LSEG Lipper data—as investors continue to deploy substantial cash into the bond market, underpinning the resilience of credit spreads.
NVIDIA stands out as a particularly attractive issuer in this wave of bond offerings, thanks to its strong credit rating, infrequent bond issuance history, and the absence of the construction-related risks typically associated with data center financings. This offering is jointly underwritten by JPMorgan, Goldman Sachs, and Morgan Stanley.
Editor/Liam