Nebius Group (NASDAQ: NBIS) shares fell about 4% to $152.74 in premarket trading Monday, continuing an October selloff that began before the AI cloud provider disclosed a $3.5 billion senior secured financing facility from Citi last week.

The facility, announced October 22, will help finance Nebius’s global data center expansion, GPU purchases and general corporate needs. Its short maturity and increasing interest margin come amid broader concerns over borrowing costs in the AI infrastructure sector, reinforced Sunday by Elon Musk’s warning about debt financing for specialized AI cloud providers.

The 364-day facility matures on October 16, 2027, according to Nebius’s filing with the Securities and Exchange Commission.

Interest initially accrues at the Term SOFR benchmark rate plus 2.75 percentage points. That additional margin increases by 0.25 percentage points every 90 days, reaching a maximum of 3.50 percentage points above SOFR, subject to other adjustments.

The agreement is secured by substantially all assets of the three borrowers—Nebius Group N.V., Nebius Inc. and Nebius B.V.—subject to specified exclusions. It also requires Nebius to maintain minimum liquidity and permits voluntary loan repayments without a prepayment penalty.

The financing announcement did not specify how much of the $3.5 billion facility had been drawn at the outset.

Nebius previously closed a separate $5.75 billion convertible senior notes offering on August 24, according to the company.

Nebius shares dropped 7.23% on Thursday, when the financing was announced, and declined another 0.27% Friday to close at $158.74.

At Monday’s premarket price, the stock was about 38.9% below its October 6 closing price of $249.87.

Separately, Nebius Tokenized bStocks (NBISB) traded at $153.52, down 2.18% over the past 24 hours, according to CoinMarketCap. The tokenized instrument trades separately from Nebius’s Nasdaq-listed shares.

Nebius Chief Operating Officer Ophir Nave said the Citi facility supports near-term infrastructure development while allowing the company flexibility over subsequent financing. He also identified potential future asset-backed borrowing supported by more than $40 billion in long-term contracts with investment-grade customers.

Nebius CEO Arkady Volozh acknowledged in an October 22 interview with Deirdre Bosa during Nvidia GTC Berlin week that some funding channels, including asset-backed financing and debt markets, were probably temporarily unavailable.

Volozh said Nebius was working with customer advances and other financing instruments that would probably provide enough funding to build at least one gigawatt of its planned AI computing capacity.

In his Sunday comments, Musk said SpaceX had closed a $40 billion debt deal to purchase AI processors.

Musk argued that debt financing had become increasingly difficult for specialized AI cloud providers without substantial revenue from businesses outside AI data centers. He predicted widespread failures and consolidation among the more than 200 neocloud companies he referenced.

Bloomberg, however, reported that pricing negotiations for SpaceX’s financing were still underway as of Sunday, citing people familiar with the discussions, despite Musk’s claim that the deal had closed.