Bond Investors Are Wary of SpaceX’s Borrowing Binge to Buy Nvidia Chips
Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX, is planning to take on another $40 billion in debt, and investors don’t like it. At all.
How do I know that?
Because the price of credit default swaps on SpaceX debt is soaring. Credit default swaps (CDSs) are a type of insurance policy that debt investors can purchase to protect against the risk of default on debt instruments. At the beginning of June, the CDS price to protect $1 million of SpaceX debt against default cost $11,000. That’s per year. Today, the same CDS costs $19,400, a 76% increase.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.