JPMorgan Offers 11% Yield on Volta’s $5 Billion AI Loan

JPMorgan Chase & Co. is currently marketing a $5 billion leveraged-loan sale for Volta Infrastructure Holdings Ltd., an artificial intelligence cloud company. The loan is being offered with an attractive yield of about 11%, which is among the highest borrowing costs seen in the market for risky debt. This type of debt has become popular for financing the AI boom.

The loan transaction is being marketed in the range of 6.25 to 6.5 percentage points above the benchmark rate, with a discounted price of 97 to 98 cents on the dollar. According to a person familiar with the matter, this pricing equates to a yield of roughly 11% at current benchmark levels.

This high yield reflects the risky nature of the debt, which is often used to finance the rapid growth of AI companies. The loan sale highlights the increasing demand for financing in the AI sector, even as borrowing costs remain elevated.