Apollo Global Management (APO) said Wednesday that widening in hyperscaler credit default swaps, or CDS, is not being driven by dealer hedging of new issuance. If that was the case, bank CDS would widen too as banks remain the single largest source of investment-grade bond supply, Apollo Global further said.

Apollo Global Chief Economist Torsten Slok's report noted that the market is repricing hyperscaler credit fundamentals on AI capex cycle with rising leverage, negative free cash flow and uncertain payback on depreciating assets.

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