JPMorgan Sees Limited Bank Risk After CoreWeave Debt Selloff

JPMorgan estimates that most European and Asian lenders have less than $500 million in potential exposure to CoreWeave, Inc. after last week’s selloff in the cloud company’s shares and bonds.

JPMorgan estimates potential CoreWeave exposure of $1 billion to $3 billion for each large U.S. investment bank and for Japan’s Mitsubishi UFJ Financial Group, Inc. It puts most European and Asian lenders below $500 million. The figures describe potential exposure, not realized losses.

Most of the bank exposure comes through delayed-draw term loans, which release funds as projects reach milestones. The loans are mainly held through special purpose entities. JPMorgan views the banks’ positions as well managed and strongly secured.

CoreWeave has also sought to bring insurers into its chip-backed financing through investment-grade ratings on specific debt. One rated facility had $2.9 billion drawn by June 30. Those ratings applied to the facility, not to CoreWeave or its other debt.