CoreWeave DDTL 4.0: Contract-Backed Financing Template
Identification
The described transaction is CoreWeave’s $8.5 billion DDTL 4.0, closed March 31, 2026. It was not HSBC-arranged. The named co-structuring agents and joint bookrunners were MUFG and Morgan Stanley; Goldman Sachs and JPMorgan were coordinating lead arrangers; Blackstone Credit & Insurance anchored the syndicate. HSBC’s public connection appears to be equity-research coverage, not this facility.
Deal at a glance
| Item | Term |
|---|
| Borrower | CCAC VIII, LLC, a wholly owned CoreWeave special-purpose subsidiary |
| Purpose | GPUs, related computing infrastructure, fees and expenses supporting one investment-grade customer contract |
| Total commitment | $8.5B |
| Tranches | $4.5B floating; $4.0B fixed |
| Availability | Multiple delayed draws through June 30, 2027, subject to site-level conditions |
| Construction-stage funding | Approximately $7.5B; up to 90% loan-to-cost |
| Stabilization top-up | Up to approximately $1.0B; total leverage can reach approximately 102% loan-to-cost |
| Maturity | March 31, 2032 |
| Credit ratings | Moody’s A3; Morningstar DBRS A (low) |
| Recourse | Non-recourse to CoreWeave, except limited customary carve-outs and a narrow parent guarantee covering GPU installation/performance obligations |
| Collateral | First-priority lien on CCAC VIII equity and substantially all of its assets: GPUs and other infrastructure, controlled accounts, the customer cloud contract and the corresponding data-center leases |
| Customer | Undisclosed investment-grade AI enterprise |
How it works
- Ring-fence one contract. CoreWeave places the customer contract, GPUs, infrastructure and relevant data-center leases in CCAC VIII.
- Underwrite the customer cash flow. Lenders rely primarily on the investment-grade customer’s committed payments and the project assets—not CoreWeave’s unsecured corporate credit.
- Draw as construction progresses. CCAC VIII draws against documented eligible costs. Funding requires purchase orders, invoices, warranties and delivery, installation, testing and acceptance evidence. Initial sizing is capped at approximately 90% of eligible project cost.
- Stabilize each site. CoreWeave completes internal testing; the customer accepts the site under its contract; operating performance becomes observable.
- Re-size from cost to cash flow. After stabilization, the governing constraint shifts from loan-to-cost to debt-service coverage. The model is refreshed with actual or hedged interest rates and actual/recent power costs.
- Draw the top-up. If the required coverage tests pass, CCAC VIII can borrow additional committed amounts—up to approximately $1B in aggregate—taking effective leverage from approximately 90% to as much as approximately 102% of project cost.
- Release excess capital. Top-up proceeds may be distributed to CoreWeave, provided the distribution and coverage conditions remain satisfied. This recycles equity from a completed deployment into the next deployment.
- Pay through a controlled waterfall. Project cash first funds operating expenses; then administrative, legal, rating and hedge costs; interest and swaps; principal; liquidity and power reserves; any required cash trap; other project costs. Only residual cash may be distributed to CoreWeave when distribution conditions are met.
- Amortize. Monthly principal amortization begins at the earliest of the commitment-termination date, a delayed-site trigger if delivery requirements are missed, or the top-up date for an accepted site. Remaining principal is due at maturity.
The “accordion”: what it is and is not
It is not a conventional accordion. The full $8.5B was committed at closing. The feature changes how much of that commitment becomes drawable.
Top-up conditions
- Relevant site has stabilized and been accepted by the customer.
- At least one full calendar month has elapsed after stabilization.
- Draw occurs before the commitment-termination date.
- Projected debt-service coverage ratio is at least 1.20×:
- Updated model uses then-current or hedged interest rates and actual/recent power costs.
- Only one top-up is permitted per stabilized site.
- No more than four top-up draws are permitted across the facility.
- All other borrowing and distribution conditions must be satisfied.
Economic effect
| Stage | Binding metric | Approximate debt | Economic purpose |
|---|
| Construction | 90% loan-to-cost | $7.5B | Finance GPU and infrastructure installation |
| Stabilized | 1.20× projected DSCR | Up to $8.5B | Monetize reduced completion risk and contracted cash flow |
| Increment | — | Up to $1.0B | Return capital to CoreWeave for redeployment |
The unusual feature is the potential rise from
90% to approximately 102% loan-to-cost after acceptance. Lenders are no longer sizing solely against hardware cost; they are lending against the value and predictability of the contracted cash flow.
Financing cost
| Cost | Term |
|---|
| Floating coupon | Daily compounded SOFR, 0% floor, +2.25% |
| Floating base-rate alternative | Base rate +1.25% |
| Fixed coupon | Approximately 5.9% at closing |
| Fixed-rate formula | 2.00% plus the blended U.S. Treasury rate tied to an approximately 3.14-year weighted average life |
| Undrawn commitment fee | 0.50% per year, paid monthly in arrears |
| Capitalized financing costs at March 31, 2026 | $142M |
| Reported effective rate at March 31, 2026 | Approximately 7% on $1.26B then outstanding |
The 7% reported effective rate is an accounting effective rate, not the stated coupon. It reflects fee and cost amortization and the initial borrowing mix.
CoreWeave said DDTL 4.0 priced
175 basis points below DDTL 3.0 and approximately
750 basis points below DDTL 1.0.
Lender protections
- First-priority security over the project company and its assets.
- Contracted investment-grade customer revenue.
- Site-level draw, delivery, installation, testing and acceptance conditions.
- Projected DSCR of at least 1.20× for top-up sizing.
- Post-availability trailing three-month DSCR covenant of at least 1.15×.
- At least 95% of projected floating stabilized borrowings hedged within 30 days after a top-up; at least 95% of projected floating borrowings hedged within 45 days after availability ends.
- Power hedging and a dedicated power reserve.
- Liquidity reserve covering forward scheduled debt service and operating requirements.
- Controlled accounts, cash waterfall and cash-trap provisions.
- Restrictions on additional debt, liens, distributions, investments, asset sales, affiliate transactions and mergers.
- Mandatory repayment upon specified asset sales, new debt, change of control or default events.
Why CoreWeave calls this the new model
The structure converts an investment-grade customer’s non-cancellable contracted payments into investment-grade project debt. The financing follows the contract:
customer commitment → dedicated assets → asset-level debt → customer payments service debt → residual cash returns to CoreWeaveFor future investment-grade customers, CoreWeave can repeat the structure in separate subsidiaries instead of relying primarily on expensive parent-level debt.
Why it is good for CoreWeave
- Lower cost: approximately 5.9% fixed or SOFR +225 bps, materially below earlier DDTLs and recent corporate borrowing costs.
- High advance rate: 90% during construction; up to approximately 102% after stabilization.
- No negative carry on the full commitment: borrowings are delayed until eligible costs are incurred.
- Equity recycling: stabilization can release approximately $1B to the parent for new deployments.
- Parent protection: debt is generally non-recourse to CoreWeave.
- Longer duration: approximately six years, aligned more closely with the customer contract and asset cash flow.
- Scalability: the same contract-backed SPV can be repeated for other investment-grade customers.
- Hyperscaler-like funding: the customer’s credit quality lets CoreWeave fund infrastructure closer to investment-grade rates despite CoreWeave’s higher-cost corporate capital structure.
Costs and constraints
- Consolidated debt still increases by the full amount drawn.
- The assets and customer cash flows are pledged and ring-fenced.
- Top-up capacity disappears if acceptance, timing or 1.20× DSCR tests fail.
- Undrawn commitments cost 0.50% annually.
- Hedging, reserves, amortization and cash traps reduce immediately distributable cash.
- Non-recourse protection has customary exceptions and limited parent installation/performance obligations.
- The structure concentrates each SPV on one customer contract and its execution timetable.
Bottom line
DDTL 4.0 finances construction at 90% of cost, then refinances the stabilized, accepted contract at up to approximately 102% of cost—without parent recourse—so CoreWeave can recover its invested equity and reuse it. Its value is not merely cheaper debt; it is a repeatable mechanism for turning investment-grade customer backlog into self-funding GPU infrastructure.
Sources