Anthropic may secure the "largest IPO in the stock market," but may not achieve "investment grade in the bond market"

In its highly anticipated IPO prospectus, Anthropic made almost no mention of the most pressing external concern—institutional-grade credit ratings—while simultaneously warning that it might seek a new financing round sooner than expected. This combination of signals is causing potential bond market buyers to take a wait-and-see approach.

The prospectus reveals that, as of June 30 this year, Anthropic already had $6.2 billion in outstanding debt, all in the form of convertible notes owed to Amazon. At the same time, the company disclosed a $15 billion five-year revolving credit facility led by Morgan Stanley, as well as an option to borrow an additional $7.7 billion in convertible notes from Amazon, Broadcom, and Google's parent company Alphabet. More notably, as of the end of June, Anthropic’s commitments to undrawn leases—primarily related to computing power and infrastructure capacity—had soared to $321 billion from approximately $50 billion at the end of last December.

The rapid swelling of debt makes the importance of obtaining an investment-grade rating even more pronounced. Once Anthropic obtains such a rating, it will be able to access the investment-grade bond market dominated by large institutional investors like insurance companies and pension funds at a significantly lower cost, tapping into a deeper pool of capital. However, Moody's, S&P, and Fitch have yet to issue any ratings for Anthropic.

Prospectus Shows Ambiguous Stance on Investment-Grade Rating

Compared to SpaceX—another tech unicorn—Anthropic's position on the investment-grade issue is noticeably more conservative. According to Bloomberg, when SpaceX prepared for its IPO earlier this year, its prospectus explicitly stated its “commitment to maintaining an investment-grade credit rating,” and it quickly secured investment-grade recognition from Moody's, S&P, and Fitch, subsequently completing a $25 billion investment-grade bond transaction in June.

Anthropic’s prospectus, however, does not outline a clear path to investment-grade status. This difference in approach makes it harder for potential bond market buyers to form clear expectations and complicates external assessments of its creditworthiness.

Despite its cautious wording, some clauses in the prospectus still imply Anthropic's underlying aim to achieve investment-grade status.

The $15 billion revolving credit facility—led by Morgan Stanley, completed in September, and dramatically upscaled from a previous $3 billion—contains a key provision: if Anthropic receives investment-grade recognition from at least two leading rating agencies, the related guarantees and collateral interests will be released.

Additionally, the interest rate on this credit line fluctuates with the rating level: an A-level rating means 75 basis points above the base rate, while the lowest investment-grade BBB– incurs an additional 125 basis points. This means the higher the rating, the lower Anthropic’s financing cost—an incentive mechanism that’s clear to see.

Balance Sheet: Ample Liquidity, But Astonishing Commitments

According to reports, the market’s assessment of Anthropic’s credit profile hinges on a core contradiction: its current leverage is still within manageable bounds, but its future commitments are astonishingly large.

Tony Trzcinka, investment-grade portfolio manager at Impax Asset Management Group, commented:

“Anthropic currently enjoys very strong liquidity, but its future obligations are enormous. Based on its current leverage, the balance sheet supports an investment-grade rating. However, the final rating will depend on how ratings agencies evaluate its committed payment plan, limited operating history, and circular counterparty relationships.”

This assessment hits at the core of Anthropic's credit story: the existing $6.2 billion in debt is not yet cause for alarm, but $321 billion in undrawn leasing commitments and the potential for an additional $77 billion in borrowing options present major uncertainties that rating agencies cannot overlook.

Broadcom’s “Chip Financing” Model: Off-Balance Sheet Leverage Concerns

Reportedly, to cover the massive compute expenses required for rapid model expansion, Anthropic has adopted a special financing structure: with Broadcom as a backer, a dedicated corporate vehicle issues debt to purchase chips, which are then leased to Anthropic for its use.

The first such transaction, “Big Sky,” totaled $35 billion, with most of the backing from Broadcom and achieved an investment-grade rating. This Monday, Broadcom announced another similar deal, this one reaching $63 billion, to provide chips to Anthropic.

This structure shifts debt pressure off-balance-sheet to some extent, but also creates what Tony Trzcinka calls a “circular counterparty relationship”—Broadcom is both chip supplier and the core guarantor of the financing, and this high dependency on a single counterparty may become a focal point for ratings agencies.

For bond investors, the most immediate question is: until Moody’s, S&P, and Fitch officially issue ratings, Anthropic’s path to the bond market remains a blank slate.

The precedent set by SpaceX provides a reference but also a warning—after SpaceX’s $25 billion investment-grade bond issue in June, the bonds were almost immediately sold off, with prices continuing to fall and bond traders left rattled. This lesson may make potential buyers even more cautious when Anthropic formally debuts in the bond market.

As undrawn leasing commitments have skyrocketed from $50 billion to $321 billion, Anthropic’s need for financing will only continue to grow. Whether or not it can enter the bond market as an investment-grade entity will largely determine whether this AI unicorn can sustain its ambitious expansion plans at a manageable cost. For now, the answer remains up in the air.