Meta pays up to borrow $15B as investors grow wary of AI debt
Meta is selling at least $15B of dollar bonds in a deal expected to reach at least $20B with a first euro note, Bloomberg reports. It is offering much higher yields than in April, as investors balk at Big Tech’s flood of AI debt. Meta is selling at least $15B of US dollar bonds, its […] This story continues at The Next Web
Meta is selling at least $15B of dollar bonds in a deal expected to reach at least $20B with a first euro note, Bloomberg reports. It is offering much higher yields than in April, as investors balk at Big Tech’s flood of AI debt.
Meta is selling at least $15B of US dollar bonds, its first debt sale in six months, Bloomberg reported on Tuesday, citing people familiar with the matter.
The two-currency deal is expected to raise at least $20B in total. It includes Meta’s first euro-denominated note, which could be sold as soon as Wednesday.
Meta is paying more to draw buyers. Its 30-year bonds are being discussed at about 2.5 percentage points above US government debt. That is nearly 0.9 points more than the early pricing on a similar bond Meta sold in April.
“ We see no need to chase it in the new issue market, ” said Ross Pamphilon of Impax Asset Management. He expects Meta and its rivals to keep spending heavily until at least 2027.
Big Tech has sold almost $430B of high-grade bonds since last year. Their bonds now trade at the widest gap over other high-grade debt since 2003. Alphabet paid up for a €6B euro sale on Monday, after Microsoft’s $25B deal last week.
Meta is also selling shares. Last week it priced $25B of common stock and $12.5B of preferred shares, part of its record equity raise .
The bond sale follows S&P’s move on Friday to cut its outlook on Meta’s credit rating over its AI spending.
