SpaceX IPO and Credit Markets Analysis (with Matt Miller)

Bruce Richards calls SpaceX the biggest rising star of all time, highlighting its refinancing of $17.5B high-yield debt at 12% to a $20B facility at ~4.6%, making it effectively net debt zero with an IG rating. He argues chip depreciation is overstated, sees strong demand for AI compute, and expects the Fed to hold rates despite inflation driven by energy supply issues.

explicit

implicit

RUT

implicit

Metals

USD

Marathon Asset Management 8.0
Hedge Fund $22.00B
Bruce Richards 9.0

SpaceX IPO and Credit Markets Analysis (with Matt Miller)

ndx

Bruce is bullish on AI infrastructure and SpaceX, which are heavily represented in NDX. He sees strong demand for compute and chips, supporting tech valuations.

wti

He notes oil is getting through the Strait despite conflict, but reserves are running low. The situation is sustainable for now but could change quickly.

yields

The Fed will be in a holding pattern for a while. Slightly higher rates in terms of treasuries for a bit longer.

2 calls

+10

slightly better than random

9/23/2025 11:37:42 AM	medium term sharp down	20 days later	-3.01%	+4.52%
9/11/2025 11:12:28 PM	short term down	5 days later	+0.37%	-0.37%

Bruce Richards

SpaceX is the biggest rising star of all time, refinancing $17.5B of high-yield debt at 12% coupons to a $20B facility at 4.6%, making it effectively net debt zero with an IG rating.

With a market cap of ~$2T and only $20B in debt (1% of EV), plus >$80B cash, SpaceX has no net debt and is clearly IG-rated.
Bruce Richards

Michael Burry's argument that chips are depreciating assets is wrong. Silicon does not degrade; chips can do exactly what they did 10 or 20 years ago. Demand for H100s and GB200s for inference will be off the charts.

Straight-line depreciation schedules don't reflect actual chip value. Chip values will hold in much better than accounting suggests.
Bruce Richards

The ECB made a policy error by raising rates into a contracting economy (GDP -0.2% last quarter). The only reason to raise rates is to dampen demand, but this is a supply-side energy shock.

Raising rates does not bring more oil out of the ground. The Fed will likely hold rates for the next year, looking through energy-driven inflation.
Bruce Richards

Credit spreads remain tight because fundamentals are strong, the economy is strong, and there is structural demand for fixed income from insurance companies and wealth channels.

IG spreads at 75bp and high-yield at ~300bp reflect stability. Treasuries are more volatile and down on the year, while credit has been stable.
Bruce Richards

The $18B in redemption requests from open-end BDCs is less than 1% of the $2.1T direct lending market. It's a feature, not a bug, driven by excessive software exposure.

There's been a complete revaluation of software businesses due to AI disruption. It's too early to tell which companies will survive, making debt support difficult to determine.

SignalTube

markets at a glance