Goldman Preps $1.15 Billion Junk Bond for Virginia Data Center Tied to CoreWeave, Weeks After the Stock Dropped 12% in One Day

Goldman Sachs is sounding out investors for a roughly $1.15 billion junk bond that would finance a data center near Richmond, Virginia, leased to CoreWeave, according to Bloomberg, which cited people familiar with the matter. The offering is expected to reach the market in September, though the report notes plans could still change.

The facility is being developed by American Real Estate Partners' PowerHouse Data Centers and Chirisa Technology Parks, with equity backing from Blue Owl Capital funds, Bloomberg reported. A developer builds the building, locks in CoreWeave as anchor tenant, then borrows against the lease.

That approach has moved significant capital. According to KuCoin's reporting, CoreWeave's combined debt and equity raises had crossed $30 billion by August 2026. A $2.6 billion delayed-draw term loan closed around August 10, rated Ba2 by Moody's and BB+ by S&P. Morgan Stanley is co-leading a roughly $3.5 billion high-yield deal for Galaxy Digital, announced July 22, to fund a CoreWeave-leased Texas facility. Earlier in the year, a Chicago-area project leased to CoreWeave priced at a 7.5% yield through Elk Grove Village Property LLC.

The financing came under real stress just weeks ago.

According to Octus, CoreWeave's $2.6 billion delayed-draw term loan struggled in the primary market in late July. The company had to widen the spread to 550 basis points and drop the original issue discount to a 96-to-97 range before orders reportedly soared to $9 billion, per the Financial Times. Octus reported CoreWeave had not publicly confirmed pricing as of its report.

Situational Awareness LP, a hedge fund built on concentrated, leveraged bets on AI infrastructure names including CoreWeave, Nebius and IREN, collapsed. Citadel bought the fund's entire public equity book in one trade, Octus reported. CoreWeave's stock closed at $60.82 on July 29, down from a 52-week high of $153.20.

Then rates moved. According to Value Add VC, citing Yahoo Finance and Motley Fool reporting, CoreWeave shares fell 12.1% to $93.17 in a single session as the 30-year Treasury yield climbed to 5.32%, its highest since early 2024. Nebius fell roughly 5% and TeraWulf roughly 6% the same day, a sign the selloff hit the whole debt-financed data center category, not just CoreWeave specifically.

The leverage metrics tell the story. Value Add VC's analysis notes CoreWeave posted $640 million in interest expense for the quarter, with debt-to-equity at 8.94x and net debt to EBITDA at 10.75x. That leverage profile compares to a utility or REIT, and a stretched one at that: even heavily leveraged REITs rarely exceed 7-8x net debt to EBITDA.

None of that reflects a weak business. CoreWeave's Q2 2026 revenue hit $2.6 billion, up 112% year-over-year, according to the company's own earnings summary compiled by Quartr. Revenue backlog reached $104.2 billion, up 246% year-over-year, and adjusted EBITDA margin came in at 59%. Full-year 2026 revenue guidance was raised to $12.4-$13.2 billion. Net loss still widened to $626 million, driven largely by that interest expense.

The bull case

Investors buying this paper aren't irrational. A 59% EBITDA margin and a $104 billion contracted backlog are real numbers, not projections, and CoreWeave's lease commitments have functioned as a form of credit enhancement for developers who otherwise couldn't get this kind of financing off the ground. Yields on CoreWeave-backed paper have compressed from north of 10% earlier in the cycle toward the 7% to 7.5% range on deals like Elk Grove Village. Institutional money appears to believe the underlying demand for AI compute is durable.

Jensen Huang made the broader case for the whole sector when Nvidia announced a $500 billion financing push with Apollo, Blackstone, BlackRock, Brookfield, Goldman and KKR, according to Breitbart's coverage of CNBC's reporting. Huang told CNBC that AI chips are now "revenue-generating assets" that are "long-lived" and "fungible," arguing compute should be underwritten like infrastructure rather than depreciating hardware. Goldman CEO David Solomon called it a "pivotal moment of a historic AI investment cycle."

The concentration risk

The skeptical case doesn't require doubting AI demand. Dozens of billion-dollar bond deals, all anchored to the same tenant's lease commitments, issued within months of each other, build a tightly wound credit structure. If CoreWeave's own credit quality wobbles, or if long rates keep climbing, every one of these deals gets repriced at once, which is roughly what happened in late July. Moody's has separately warned that the scale of hyperscaler AI spending is starting to squeeze free cash flow industry-wide.

Kevin O'Leary, in comments to Fox News Radio's Guy Benson Show, framed the stakes differently, arguing the US can't afford to slow down data center construction given China's own buildout. That argument is about strategic competition, not credit risk, and it doesn't address whether the debt structure underneath these projects is sound.

Goldman, CoreWeave and Blue Owl did not respond to Bloomberg's requests for comment on the Virginia deal. Whether the $1.15 billion offering prices near the 7% range investors have recently accepted, or has to widen the way CoreWeave's own term loan did in July, will be the next data point on whether Wall Street's app