CoreWeave: buying into DDTL 5.5

Company overview

CoreWeave was founded in September 2017 and launched its cloud platform in 2020. It rents high-end NVIDIA GPU capacity, with networking, storage and software, to AI laboratories, hyperscalers and enterprises, and is headquartered in Livingston, New Jersey. It listed on Nasdaq in March 2025. Michael Intrator, a co-founder, is chief executive and chairman; Nitin Agrawal is chief financial officer. [S1, S3]

The business is capital intensive and contract backed. Customers sign take-or-pay contracts, typically for one to six years, and 98% of revenue in the six months to June 2026 came from committed contracts. Remaining performance obligations (RPO) were $103.7bn at 30 Jun 2026, up from $60.7bn at December 2025 and $15.1bn at December 2024; 41% is expected to be recognized within 24 months. Revenue was $5.1bn in 2025 and $4.7bn in the first half of 2026. Active power reached 1.5 GW at June 2026, with about 3.7 GW contracted. [S1, S2, S4] Customers are concentrated. Microsoft was 62% of 2024 revenue. In 2025 one customer was 67% of revenue; in the second quarter of 2026 the three largest were 36%, 26% and 10%. Disclosed commitments include OpenAI (up to about $6.5bn through 31 May 2031), Meta (initially up to about $21.0bn under a March 2026 order form) and Jane Street (about $6.0bn, announced April 2026). [S1, S3]

Growth is funded mostly with debt. Capex was $10.3bn in 2025 and $14.1bn in the first half of 2026, and total debt principal was $35.6bn at 30 Jun 2026. Most GPU fleets sit in delayed-draw term loan (DDTL) vehicles: each is an SPV that buys GPUs, leases capacity to named customers under MSAs and repays from those contract cash flows. DDTL 1.0 to 3.0 and 5.0 are guaranteed by the parent; DDTL 4.0 is non-recourse. The parent also has senior unsecured notes, convertible notes, OEM vendor financing and a revolver. Management reported that disclosure controls were not effective at 30 Jun 2026. [S1]

DDTL 5.5 is one of these vehicles. The press release describes its customers only as a "diverse group of leading AI, financial services, and technology customers" and says the contracts average approximately three years against a loan of about five years, so lenders "underwrite renewal risk". The five initial MSAs, their counterparties and the data center sites are redacted in the filed agreement. [S5]

Your memo should answer

1. 01Using Exhibits 4 and 5, compute (a) the Funding Date Capital Expenditures a full draw requires, the lenders' loan-to-cost and the parent's equity at risk; (b) the minimum Total Projected Contract Value consistent with a 2.40x PCVR at full draw and at the $1.3bn Minimum DDTL Amount, and the annual contracted revenue that implies if contracts average about three years; and (c) the depreciated value of the financed equipment at the Term Maturity Date on the agreement's 6-year straight-line basis, compared with a loan held at the Minimum DDTL Amount. State your placed-in-service assumption. Explain why the PCVR cannot be computed from public data and which definition you would ask for first.
2. 02Compute the all-in yield on Tamsin's position at 99.50 using the house convention and 1M CME Term SOFR of 3.92490% (9 Oct 2026), showing the undrawn fee separately. Compare it with DDTL 5.0 and DDTL 4.0, with the spread of CoreWeave's 9.25% 2030 notes over interpolated Treasuries (Exhibit 6), and with B-rated BSL at S+412 plus the 178bp private-over-public premium. Is Term SOFR + 5.50% adequate for a Ba2/BB+ SPV loan guaranteed by a parent rated Ba3/B+/BB-, and what price would you bid?
3. 03Build a downside case for the SPV. Use CoreWeave's worst quarter in Exhibit 2 (Adjusted EBITDA margin and Adjusted EBITDA ÷ interest expense) as the proxy for SPV operating margin. At contract expiry, re-lease at a sourced rental decline from Exhibit 7 (state which index and why), and add a severe case based on older-generation pricing. Add the forward curve +100bp. Show DSCR, PCVR, any resizing prepayment, the loan balance at maturity against depreciated value and hardware price references, and estimate recovery with and without the parent guarantee.
4. 04Critique the documents as a lender: Qualified Customer self-certification, the redacted Total Projected Contract Value and Renewal Deadline, borrower-calculated Projected DSCR, the $1.3bn Minimum DDTL Amount and Distribution Conditions, the 70% advance on capex that includes ancillary hardware and installation, Debt Service that excludes the bullet, unlimited cures to three months after the Commitment Termination Date, Management Agreement fees paid ahead of the sweep, and the $260M free prepayment basket. Which three to five matter most? As a secondary buyer you cannot reopen the documents alone: size a counter-proposal (amount, price, conditions) that protects Tamsin.
5. 05Recommend approval, approval with conditions or decline. State your hold size and price, the diligence items that must be closed before trade date, and how this position should count against Tamsin's exposure to CoreWeave and to AI-compute counterparties.

Financials ($M)

Term sheet

Facility

$2.6bn senior secured delayed-draw term loan (DDTL 5.5); draws to 31 Dec 2026; $1.2bn drawn as disclosed on 12 Aug 2026

Borrower and guarantor

CoreWeave Financing DDTL V-V, LLC (SPV); unconditional guarantee from CoreWeave, Inc.; equity pledge from the Holdco

Proposed purchase (hypothetical)

$250.0M of commitments at 99.50: $115.4M funded, $134.6M unfunded

Pricing

Term SOFR + 5.50%, 0.00% floor, 0.50% undrawn fee; 1M CME Term SOFR 3.92490% on 9 Oct 2026

Maturity

1 Sep 2031; contracts average about three years

Call protection

Make-whole in year 1, 2.00% in year 2, 1.00% in year 3; first $260M of prepayments free

Amortization

Schedule 2.08 (not filed); 100% sweep to $1.3bn after the Commitment Termination Date

Financial covenants

DSCR at least 1.35x (trailing three months, monthly); Liquidity Requirement $112.5M, then the greater of 10% of Loans and $112.5M; equity cures unlimited to three months after the Commitment Termination Date, then three in any four months

Contract tests

Cash Trap if PCVR below 2.40x; renew or replace maturing MSAs to keep Projected DSCR at least 1.35x and PCVR at least 2.40x, or prepay

Asset-class specifics

Loans at most 70% of Funding Date Capital Expenditures; Qualified Customer self-certified by the borrower; collateral accounts and monthly waterfall

Exhibit 4: DDTL 5.5 key numbers ($M unless stated)

Commitments

2,600.0

Advance rate on Funding Date Capital Expenditures

70.0%

Minimum DDTL Amount

1,300.0

PCVR Cash Trap below

2.4x

Minimum DSCR

1.35x

Liquidity Requirement floor

112.5

Exhibit 4: Proposed settlement (hypothetical) ($M)

Commitment purchased

250.0

Funded at settlement

115.4

Unfunded

134.6

Price

99.50

Cash paid

114.1

Exhibit 6: Reference points (rate)

DDTL 4.0 (Mar 2026)

Term SOFR + 2.25%

DDTL 5.0 (May 2026)

Term SOFR + 4.50%

DDTL 5.5 (Aug 2026)

Term SOFR + 5.50%

9.25% 2030 notes, 8 Oct 2026

92.03 / 12.00%

B-rated BSL STM, Sep 2026

S+412

1M CME Term SOFR, 9 Oct 2026

3.92490%

Exhibit 7: GPU rental ($/GPU-hr)

H100 transacted (OCPI), 11 Oct 2026

2.65

B200 transacted (OCPI), 11 Oct 2026

7.45

A100 transacted (OCPI), 11 Oct 2026

0.96

H100 listed median, week of 5 Oct 2026

3.49