NEW YORK — Nvidia planned to sell $25 billion of investment-grade debt in the U.S. on Monday, marking its first bond issuance since 2021. The company received more than $85 billion in orders for the bonds by early afternoon in New York.

Nvidia disclosed plans for the capital raise with the SEC on Monday without specifying the exact dollar amount in the filing. The initial target size of the bond offering was $20 billion before being increased. The bond offering consists of seven tranches with maturities ranging from two years to 30 years. The expected yield for the 10-year bond tranche is 0.5 percentage points above U.S. Treasuries, a decrease from an initial pricing discussion of 0.75 percentage points.

Upon completion of the current offering, Nvidia's total outstanding debt will increase from approximately $8.5 billion to about $30 billion. The company stated it intends to use the net proceeds for general corporate purposes, including repayment and refinancing of outstanding notes. Goldman Sachs, JPMorgan, and Morgan Stanley are acting as bookrunners for the transaction.

Lauren Wagandt, a portfolio manager at T Rowe Price, said, "It's a very high-quality company at the end of the day. And it doesn't come to the market as often as the other tech names." Nvidia holds an AA credit rating.

Tom Murphy, global head of investment-grade credit at Columbia Threadneedle Investments, said, "The market has started to get worried about these circular financings, because if somebody in that ecosystem is having a problem, then the whole thing could be a problem." Murphy said. Nvidia agreed to act as a financial guarantor for cloud computing customers including CoreWeave and Nscale, and has committed more than $90 billion in investments to AI developers and suppliers.

Nvidia's market capitalization fell below $5 trillion at the end of last week after peaking at approximately $5.7 trillion in May. Company shares rose 3.5% on Monday and were up approximately 14% for the year.

Nvidia reported $49 billion in free cash flow in the latest quarter, an increase from $35 billion in the same period the previous year. In May, the company increased its dividend from $0.01 to $0.25 per share and announced a plan to repurchase $80 billion in shares. Nvidia reiterated plans to return approximately 50% of its free cash flow to shareholders during the current year.