Private Credit Lenders Discuss $35 Billion Financing Package for Chipmaker

Apollo and Blackstone are among private credit lenders involved in talks with a chipmaker over a roughly $35 billion financing package, according to a report published Friday. The discussions involve a group of lenders in the private credit market providing debt for what would rank among the largest leveraged financings arranged this year.

The size of the package reflects continued appetite among institutional investors for exposure to the semiconductor industry. Private credit funds have expanded their role in large corporate borrowings as traditional banks face regulatory limits on leveraged lending.

A financing of this scale would likely combine multiple tranches of debt with varying terms to meet the needs of both the borrower and the lending syndicate. The chipmaker has not publicly detailed the intended use of proceeds. Such packages are often assembled to support acquisitions, refinance existing debt or fund capital expenditures in a sector that requires heavy research and development spending.

Market participants have noted an increase in private credit participation in technology-related deals over the past two years. The talks come as interest rates remain above levels seen in the previous decade, affecting the cost of capital for highly leveraged transactions.

A $35 billion financing would exceed most recent private credit deals completed in the technology hardware space. The structure would likely require coordination among more than a dozen institutional lenders to diversify risk. The involvement of Apollo and Blackstone, two of the largest alternative asset managers, signals confidence in the credit quality of the semiconductor borrower.

Final terms, including pricing and covenants, have not been disclosed.