AI Push to M&A-Starved Loans Gains Fuel With Supersized QTS Deal

Wall Street banks are financing the AI buildout through US leveraged loans, with QTS Realty Trust tripling its proposed loan to $3.25 billion and canceling a bond sale. JPMorgan Chase is leading the loan, backed by data centers, as the market seeks deals amid a shortage of buyout transactions.

Bloomberg -- Wall Street banks, scouring every corner of the capital markets to finance the artificial intelligence buildout, have landed on a new pool of funds: US leveraged loans, which are clamoring for the transactions amid a dearth of buyout deals. Most Read from Bloomberg - Thailand Scraps Plan to End Visa-Free Entry for Indian Tourists https://www.bloomberg.com/news/articles/2026-07-14/thailand-drops-plan-to-end-visa-free-entry-for-indians-after-hit-to-tourism?utm campaign=bn&utm medium=distro&utm source=yahooUS - OpenAI's First Device Will Be Movable, Screenless Speaker Built as AI Companion https://www.bloomberg.com/news/articles/2026-07-14/openai-s-first-device-will-be-moveable-screenless-speaker-built-as-ai-companion?utm campaign=bn&utm medium=distro&utm source=yahooUS - US Hits Iran With Strikes, Blockade as Trump Plans Hormuz Charge https://www.bloomberg.com/news/articles/2026-07-13/trump-says-us-will-be-reimbursed-20-rate-for-hormuz-traffic?utm campaign=bn&utm medium=distro&utm source=yahooUS The push led QTS Realty Trust LLC, a unit of Blackstone Inc., to more than triple the size of a proposed loan to $3.25 billion, and nix plans for a $1 billion bond sale, according to people familiar with the transaction. JPMorgan Chase & Co. is leading the loan sale, the people said. The data center operator is no stranger to the capital markets. In the last year, QTS raised north of $6 billion in investment-grade bonds, both public and private, and also issued asset-based securities backed by data-center cash flows. The latest loan, which carries some hallmarks of structured financing, is backed by a portfolio of data centers dubbed as Project Magnolia. Proceeds will repay some construction financing and other existing debt, as well as fund other corporate costs, the people said. QTS' transaction comes after CoreWeave Inc. sold a $3.1 billion loan in May. There is an expectation of more to come, including a potential first-ever leveraged loan for Bitcoin miner TeraWulf Inc. "I'd be shocked if we don't see more," said Nick Losey, portfolio manager at Barrow Hanley Global Investors. For some on the buyside, loans are a logical next step in the AI construction boom. The debt market has been crowded after companies from Amazon.com Inc. to SpaceX raised more than $335 billion globally so far this year, mostly in bonds, Bloomberg-compiled data show. "We're still in the early innings of the AI buildout, and seeing signs issuers may be diversifying funding sources," said John Yovanovic, the co-head of leveraged finance at MetLife Investment Management. "We have room, investment grade has absorbed a lot year-to-date," he said in reference to the junk market's ability to take on new deal flow. Representatives for Blackstone and JPMorgan declined to comment. A representative for QTS didn't respond to an email seeking comment. Click here for Bloomberg News's Global AI Infrastructure Debt Monitor.