Neocloud debt: the loan whose rate rises every 90 days

Eight days before Elon Musk wrote that debt markets "have almost entirely shut off access to money for any company that doesn't have substantial revenue independent of AI data centers," Nebius signed a $3.5 billion loan with Citibank. The terms show what neocloud debt costs now. It runs one year, it is secured by substantially all of each borrower's assets, and its margin over SOFR rises 0.25% every 90 days, up to 3.50%.

Nebius's $3.5 billion bridge loan from Citibank, signed Oct 17, puts a price schedule on neocloud debt, the borrowing that AI cloud companies such as CoreWeave, Nebius and IREN use to build capacity. According to the company's 6-K, loans "bear interest at Term SOFR plus an applicable margin commencing at 2.75% per annum and increasing by 0.25% for each 90-day period after October 17, 2026 up to 3.50% per annum (subject to other adjustments)." That works out to three steps, to 3.00%, then 3.25%, then 3.50%, where the margin stops rising. By our arithmetic, at 90 days a step, the cap arrives around day 270. The filing gives no step dates and does not spell out the other adjustments. Term SOFR is a floating benchmark, so the all-in rate also moves with it. Nebius, CoreWeave and IREN have each said they pay for new capacity with customer prepayments alongside debt or other financing, covered below.

What Nebius's $3.5 billion loan says, in the filing

On Oct 17, three Nebius entities (Nebius Group N.V., Nebius Inc. and Nebius B.V.) signed a Bridge Facility Agreement with Citibank, N.A., which the 6-K names "as mandated lead arranger and lender." Nebius filed the 6-K on Oct 22.

• Size and use. "a senior secured term loan facility in an aggregate principal amount of $3.5 billion for the purpose of financing the buildout of the Borrowers' GPU infrastructure capacity and for other general corporate purposes."
• Length. The press release gives it a "364-day maturity." The 6-K says, "The maturity date of the Facility Agreement is October 16, 2027."
• Collateral. The loan is "secured by a security interest on substantially all of each Borrower's assets, including all of the shares of the US Borrower and Dutch Borrower held by the Company, subject to exceptions for excluded assets and permitted liens." That covers all three borrowers, plus the parent's shares in Nebius Inc. and Nebius B.V.
• Early repayment. "The Borrowers may voluntarily prepay loans under the Facility Agreement without premium or penalty."
• Covenant. The agreement "contains a minimum liquidity financial covenant."

Chief Operating Officer Ophir Nave described the loan as one step in a sequence. "Sequencing our financing is how we optimize our long-term cost of capital. This facility provides additional financing to support our near-term capacity build-out," he said in the release. He added that Nebius has other sources, "including asset-backed financing based on investment-grade customer commitments of more than $40 billion of long-term contracts." The $40 billion figure describes Nebius's own long-term customer contracts.

What Musk said about debt markets

On Oct 25, Elon Musk replied on X to a post by Chamath Palihapitiya. The reply included this sentence: "As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn't have substantial revenue independent of AI data centers."

Musk did not name Nebius, CoreWeave or IREN. Nebius had signed its Citibank loan eight days before the reply and filed it three days before. The filings below show what Nebius, CoreWeave and IREN put in place in the months leading up to it.

How Nebius paid for its build-out before October

The October loan followed Nebius's first secured facility. On July 17, Nebius announced "its first senior secured debt facility for approximately $775 million," backed by "deployed GPU infrastructure and contracted cash flows from an agreement with an investment-grade customer." The July facility "matures October 31, 2030, and is priced at SOFR + 2.50%." Set side by side, the October loan is larger, runs for 364 days instead of more than four years, and starts at a higher margin.

On the Aug 12 call, CEO Arkady Volozh tied that July loan to Nebius's long-term customer contracts: "They help us to finance our build-out faster and more efficiently. The secured debt facility we raised in July was on the back of one of these deals."

CFO Dado Alonso put customers ahead of lenders on the same call. "Our first sources of capital remain customer prepayments and operating cash flow. We expect more than $9 billion of upfront customer prepayments in 2026."

How CoreWeave debt financing works, in its own filings

CoreWeave's CFO, Nitin Agrawal, laid out the mix on the Aug 11 call: "The cost, primarily in the form of CapEx is front-loaded requiring a combination of debt, customer prepayments, and other corporate level capital to finance its build out."

Three of this year's filings show the debt side.

• DDTL 4.0 (March). CoreWeave's first-quarter release describes "an $8.5 billion non-recourse investment grade rated delayed draw term loan facility priced with a floating rate tranche of SOFR + 2.25% and a fixed rate tranche of approximately 5.9%." The approximately 5.9% fixed rate is as of the initial draw. On the May 7 call, CEO Michael Intrator said, "The transaction, which was well oversubscribed, was priced at a level implying a cost of less than 6%."
• DDTL 5.5 (August). An 8-K describes a "$2.6 billion delayed draw term loan facility" at "Term SOFR (subject to a 0.00% floor) plus an applicable margin of 5.50% per annum." It matures Sept 1, 2031, is "secured by substantially all assets of the Borrower and its subsidiaries," and requires a "debt service coverage ratio of at least 1.35x."
• Convertible notes (September). On Sept 22, CoreWeave completed "$4.2 billion aggregate principal amount of its 2.875% Convertible Senior Notes due 2033." The filing calls them "general senior, unsecured obligations of CoreWeave."

CoreWeave also signed a separate $3.1 billion DDTL 5.0 on May 15 and issued senior notes: $2.75 billion of 9.750% Senior Notes due 2031 in April, and $1.25 billion of 9.625% plus €2.0 billion of 8.500% Senior Notes due 2032 in June.

CoreWeave's borrowing shows up in its income statement. CoreWeave's second-quarter release reports revenue of $2.58 billion and interest expense, net, of $640 million, up from $267 million a year earlier. Agrawal said that rise was "driven by increased debt to support the continued scaling of our infrastructure and delivery of our contracted customer commitments." Agrawal also said, "Over the past year, we have reduced our weighted average cost of debt by almost 300 basis points, representing approximately $1.1 billion of annualized interest savings based on our end of Q2 debt load." The release puts revenue backlog at "approximately $104 billion as of June 30, 2026."

IREN: prepayments, cash and other financing

IREN's Microsoft contract shows how it planned to pay. On Nov 3, 2025, IREN announced a contract with Microsoft with a "five-year term, with a total contract value of approximately $9.7 billion, including a 20% prepayment," alongside a purchase from Dell of approximately $5.8 billion. The release said, "IREN expects to fund the capital expenditures associated with the contract through a combination of existing cash, customer prepayments, operating cashflows and additional financing initiatives." Tellvest also covered how Microsoft, Alphabet and Amazon pay for AI capex.

Neocloud debt at a glance: how CoreWeave, Nebius and IREN finance AI data centers

The table lists each financing source named in the filings and calls above, by company, size and terms.

What analysts asked about funding

Analysts asked Nebius and IREN directly how they would pay for new capacity. CoreWeave's financing came up on another company's call.

On Nebius's May 13 call, the company's investor relations team read out a question from Tal Liani of Bank of America: "How do you plan to finance this additional CapEx?" Alonso answered that "more than 90% of the CapEx range that we projected in February is already secured by cash and contractual commitments," and added, "On the debt side, we expect to use asset-backed financing against our contracts with Microsoft and Meta."

On IREN's May 7 call, Austin Ortiz on the line for John Todaro of Needham asked "how do you intend to finance the build-out for the recently announced NVIDIA deal?" CFO Anthony Lewis said, "In terms of the CapEx for GPU, obviously we've got a range of financing sources available to us." Co-CEO Daniel Roberts followed with "The reality is capital markets are open."

On Applied Digital's April 8 call, Northland Securities' Mike Grondahl asked about restructured leases. CFO Saidal Mohmand pointed to CoreWeave: "In terms of rate, we've seen that CoreWeave through their DTL, they've been able to lower their financing costs significantly." Tellvest tracks remarks like this as Mentions, what companies say about each other on earnings calls, and company pages show the mention quotes available for that company.

What to listen for on the November calls

IREN reports on Nov 5, with its call at 4:00 PM CT. CoreWeave and Nebius had not announced their dates as of Oct 26.

• Nebius. The release said the bridge loan "Increases flexibility over timing and structure of longer-term financing to fuel growth in 2027 and beyond." Listen for what that longer-term financing is, and whether the "more than $9 billion" of 2026 prepayments still holds.
• CoreWeave. Listen for which kind of facility comes next and at what margin, and for how third-quarter interest expense compares with the second quarter's $640 million.
• IREN. Listen for what the "additional financing initiatives" in its Microsoft plan turned into.

Tellvest tracks 500+ U.S. companies and shows a 1-10 sentiment score for every quarter. All data is sourced from SEC filings, company-reported results, and public earnings transcripts. You can find every company Tellvest covers on Browse companies, including CoreWeave, Nebius and IREN.

Questions about neocloud debt

What is neocloud debt?

Neocloud is a nickname for newer AI cloud companies that rent out GPU computing, such as CoreWeave, Nebius and IREN. Neocloud debt is what they borrow to build that capacity. In their filings this year it includes term loans, delayed draw term loans, senior notes and convertible notes, a form of AI data center debt financing that sits alongside customer prepayments and operating cash.

How are neoclouds like CoreWeave and Nebius financing their AI data centers?

Neoclouds such as CoreWeave, Nebius and IREN finance AI data centers with a combination of debt and customer prepayments, plus cash and other capital. CoreWeave's CFO said the build-out requires "a combination of debt, customer prepayments, and other corporate level capital." Nebius's CFO said, "Our first sources of capital remain customer prepayments and operating cash flow," and Nebius signed a $3.5 billion bridge loan from Citibank on Oct 17, 2026. IREN said it expected to fund its Microsoft contract "through a combination of existing cash, customer prepayments, operating cashflows and additional financing initiatives."

What are the terms of Nebius's $3.5 billion Citibank loan?

Nebius signed the senior secured bridge loan with Citibank, N.A. on Oct 17, 2026. It has a 364-day maturity ending Oct 16, 2027, is secured by substantially all of each borrower's assets, and can be repaid early without premium or penalty. Interest is Term SOFR plus a margin that starts at 2.75%.

How does the Nebius loan's rate rise every 90 days, and where does it stop?

The margin over Term SOFR rises by 0.25% for each 90-day period after Oct 17, 2026, up to 3.50% per annum, subject to other adjustments the filing does not detail. That is three steps: 3.00%, 3.25% and 3.50%. At 90 days a step, the cap arrives around day 270 by our arithmetic. The filing does not list step dates.

How does CoreWeave finance its data centers?

CoreWeave's CFO said the build-out requires "a combination of debt, customer prepayments, and other corporate level capital." Its filings this year include an $8.5 billion investment grade rated delayed draw term loan in March, senior notes in April and June, more delayed draw term loans of $3.1 billion in May and $2.6 billion at Term SOFR plus 5.50% in August, and $4.2 billion of 2.875% convertible notes due 2033 in September.

How is IREN paying for its Microsoft contract?

When IREN announced the five-year, approximately $9.7 billion Microsoft contract in November 2025, it said it expected to fund the related capital spending "through a combination of existing cash, customer prepayments, operating cashflows and additional financing initiatives." The contract includes a 20% prepayment.

What did Elon Musk say about debt markets?

In an Oct 25 reply on X to Chamath Palihapitiya, Musk wrote, "As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn't have substantial revenue independent of AI data centers." He did not name Nebius, CoreWeave or IREN.

When do CoreWeave, Nebius and IREN report next?

IREN reports on Thursday, Nov 5, with a call at 4:00 PM CT. As of Oct 26, CoreWeave and Nebius had not announced their dates.

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