"Pacific Investment Management Co. (PIMCO) is the anchor lender on the deal. The debt, which matures in 2049, is fully amortising and has been rated A+ by S&P. The bonds were priced at around 225 basis points over U.S. Treasuries."
https://pe-insights.com/blue-owl-and-meta-close-record-30bn-...
Oof.. I don't know about this one.
Ugh. A year ago, I was (a) fairly confident that the AI bubble would burst, but (b) fairly confident that contagion would be limited; a bunch of startups would evaporate, and some VCs would be badly burned or fail, but the broader economy would largely shrug and carry on.
Based on this sort of thing, I'm not sure I still believe (b).
1. Yes, there is a bubble, but it's not the same. Companies are profitable.
2. It may burst, but this may go on for another 2+ years. No one knows.
3. Even after the burst, we would have valuable AI infrastructure, just like all the excess internet capacities after the Dotcom.
Base on this, I think the bubble will burst sooner. Sentiment can shift real quick.
Does this mean that this investment spreads the bubble burst risk into people's pension funds? (those lucky enough to have such a thing) Or, not necessarily?
They are required to pick based on some defined formula which the various stakeholders signed off on, and hence are prime juicy targets for people trying to game systems.
They also took the ‘08 mortgage crisis right in the shorts, for the same reasons.
Knowing when it will burst is.