Meta Looks to Raise as Much as $25 Billion With Jumbo Bond Sale
Meta Platforms Inc. is looking to sell between $20 billion and $25 billion of investment-grade bonds, according to people with knowledge of the transaction, as the Facebook parent boosts spending on infrastructure for the artificial intelligence boom.
The company is selling the debt in as many as six parts, said one of the people, asking not to be identified because they aren’t authorized to speak on the matter. Initial price discussions for the longest portion of the deal — a note maturing in 2066 — are for a yield of as much as 1.8 percentage point more than Treasuries, one of the people added, asking not to be identified.
Citigroup Inc. and Morgan Stanley are managing the bond offering. Citi didn’t immediately respond to a request for comment. Meta and Morgan Stanley declined to comment.
The debt sale comes a day after Meta posted better-than-expected sales for the first quarter, while projecting higher capital expenditures for the year than it had forecast in January. Big tech companies known as hyperscalers are competing for dominance in artificial intelligence, borrowing billions of dollars to build data centers and other infrastructure. Some investors fear that the investments won’t pay off.
Meta is tapping the investment-grade bond market only six months after raising $30 billion in one of the market’s biggest-ever corporate debt deals. Amazon.com Inc. borrowed almost $54 billion in the US and European high-grade bond markets last month. In February, Alphabet Inc. priced about $32 billion in dollar and euro notes while Oracle Corp. raised $25 billion from a bond sale that attracted a record $129 billion of orders at its peak.
Investors have readily absorbed the supply of bonds from these companies— even during bouts of volatility tied to the conflict in Iran — underscoring relentless demand for exposure to the artificial intelligence boom. Other hyperscalers also posted results on Wednesday and projected capital expenditure, with the four biggest firms now planning to spend as much as $725 billion this year.
“Post earnings hyperscaler supply was highly anticipated by the market,” said Tony Trzcinka, a portfolio manager at Impax Asset Management. “I expect demand to hold with the caveat that the market is demanding concessions.”
On Wednesday Meta raised its spending outlook for the year, projecting full-year capital expenditures between $125 billion and $145 billion, far exceeding analysts’ estimates and marking a roughly 7.4% increase from what the company had previously projected.
