Hyperscaler CDS Risk Increases to 60 Basis Points, Apollo Reports

Apollo Global Management warned that corporate debt linked to major cloud computing firms is becoming riskier. As of October 2025, the gap between hyperscaler credit default swaps (CDS) and bank CDS widened to approximately 60 basis points from around 0. This rise is not due to increased dealer hedging but reflects worsening hyperscaler credit fundamentals, including rising leverage and negative free cash flow. This trend could affect financial conditions for cloud providers, influencing their ability to manage debt in an AI-driven market.

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