Goldman Delta-1 on AI bonds: "Reflexivity remains the most important point… and the bonds deserve attention. The hyperscalers have enormous financial capacity and are not heavily levered on balance sheet. But repricing is still punitive for equity multiples, and the consequences become more material in the leveraged pockets financing the build-out. Look at Meta’s Hyperion financing through the Beignet SPV. The $27. 3 BN bond was issued at par, quickly traded above 109 and is now around 97. Meta has plenty of operating earnings, but the broader hyperscaler problem is deteriorating FCF conversion as capex accelerates. A bet on these companies is increasingly a bet that revenue inflects before spending peaks. The risk is that today’s capacity build becomes tomorrow’s compute oversupply, just as a much larger depreciation charge begins washing through the income statement."(zerohedge)