JPMorgan: CoreWeave Debt Selloff Poses Limited Risk to Global Banks

Odaily reports: JPMorgan estimated on Tuesday that most banks globally have limited exposure to CoreWeave (CRWV.O). This follows a sharp decline last week in the share price and bonds of the Nvidia-backed cloud computing company, driven by investor concerns over its debt financing issues.

JPMorgan stated that while major U.S. investment banks and Japan's Mitsubishi UFJ Financial Group may have potential exposure to CoreWeave ranging from $1 billion to $3 billion, most European and Asian participants have exposure of less than $500 million. The majority of this is structured through delayed draw term loans, which are primarily held through special purpose entities, with funds to be released as the project reaches milestones. From the perspective of the financing banks, JPMorgan believes that banks have managed their exposure to CoreWeave prudently and with very adequate collateral.