Bond markets have raised the price of guarding against losses on AI infrastructure borrowers even as French sovereign yields climb, putting companies’ cash generation and France’s fiscal plans under scrutiny.
France’s 10-year government bond yield reached 5.1415% on Oct. 22, its highest level since July 2002, Reuters reported. The National Institute of Statistics and Economic Studies (INSEE) said France’s general government debt totaled €3,595.5 billion, or 119.0% of gross domestic product, at the end of the second quarter.
S&P Global Market Intelligence data cited by Reuters showed that CoreWeave’s five-year credit default swap spread topped 1,100 basis points on Oct. 15. The yield on the company’s 2031 bond reached 16% before falling to about 14%. CNBC’s analysis of FactSet data put Oracle’s five-year CDS spread at 308.25 basis points on Oct. 21, compared with 141 basis points on Jan. 2.
A five-year credit default swap (CDS) pays protection to a buyer if a borrower defaults; its spread measures the cost of that cover. A wider spread signals that markets are pricing in more credit risk, but does not mean a default is expected. One inference from the market moves is that borrowers may face more expensive new loans or debt rollovers.
S&P’s Oct. 15 outlook puts capital budgets for the six cloud providers it rates at $470 billion in 2025, $870 billion in 2026 and $1.3 trillion in 2027. It expects the companies’ combined free operating cash flow to stay negative in 2026 and 2027, with a return to positive territory forecast only in 2029. The report says borrowing, leases, guarantees and similar commitments are playing a larger role in funding the buildout. S&P analysts are watching whether AI investment can generate returns, whether demand holds up, and whether excess capacity or contractual obligations add credit risk.
For France, Moody’s rating is Aa3 with a negative outlook, according to Agence France Trésor, the country’s debt agency. The agency’s calendar lists Oct. 23 as a rating date. Moody’s told Reuters on Oct. 2 that approval of France’s 2027 budget was highly uncertain.
