Pimco Says Junk Debt for Data Centers Diverging Into Two Markets

Pacific Investment Management Co.’s leveraged finance chief urged investors to be cautious with the high-yield debt that finances data centers, where winners and losers are starting to emerge as issuance booms.

“There’s already been some nervousness when some of the deals have started coming out. If you think about it, a year ago the size of that part of the market was zero,” Pimco’s David Forgash said Thursday in a Bloomberg Television interview. “And now we’re up about 4% in the high-yield market. And by the next two years the expectation is it will be 10%.”