Anthropic faces junk rating after Blackstone reversal

Blackstone now expects Anthropic to receive a below-investment-grade credit rating following its initial public offering, a significant reversal from the firm’s earlier guidance to investors. The change in outlook, reported by the Financial Times on Thursday, directly impacts the cost of capital for Anthropic’s spending plan, which exceeds $800 billion.

Previously, Blackstone informed investors that it anticipated Anthropic would secure an investment-grade rating by the end of the year. That expectation has shifted to a prediction of a junk rating, defined as any grade below the BBB- threshold. This distinction is critical because many institutional lenders, including pension funds and insurers, face regulatory or internal caps on holding junk debt. A reduction in the pool of eligible lenders typically results in higher interest rates for the borrower.

Project North Star Exposure

The financial implications of this rating shift are concentrated in Project North Star, Anthropic’s $63 billion chip financing initiative. The structure of this debt is split between secured and unsecured portions. Over $42 billion of the loans in this project carry a guarantee from Broadcom, a chipmaker that holds an investment-grade credit status. This guarantee provides a layer of security for lenders on that portion of the debt.

The remaining $18 billion of Project North Star loans rests solely on Anthropic’s creditworthiness. Blackstone funds have taken approximately $9 billion of this unsecured slice. These loans are yielding above 10%, a rate that reflects the higher risk profile associated with speculative-grade debt. As Blackstone’s exposure to this specific tranche is substantial, the final credit rating assigned to Anthropic will directly influence the valuation and risk assessment of these holdings.

Rating Agency Outlook

Kroll Bond Rating Agency (KBRA) assigned Anthropic a BB+ rating in June, which is one notch below the investment-grade line. Blackstone now expects the major rating agencies to assign a grade in the BB range, based on feedback it has received from them. This expectation contrasts with the stance of some major banks; Goldman Sachs and Morgan Stanley have previously advocated for Anthropic to receive an investment-grade rating.

Anthropic’s financial position includes more than $112 billion in cash holdings. Investors anticipate that the company’s IPO will raise roughly $100 billion in additional capital. The company’s prospectus describes its compute plan as “bold but sane.” Despite these cash reserves and the expected capital raise, the credit rating agencies have not yet issued a final verdict. Fitch, Moody’s, and S&P have not ruled on Anthropic’s credit status. Their decision, expected to follow the company’s Nasdaq debut by late November, will determine the interest rates Anthropic pays to finance its infrastructure build-out. For context, SpaceX secured investment-grade ratings from all three major agencies days after its own IPO in June, a precedent that may not apply to Anthropic given the current agency feedback.