Meta Platforms will borrow $15 billion in the US dollar bond market across five tranches, the company said on Tuesday, turning to debt investors to pay for data centres and computing capacity for artificial intelligence.
The first two tranches are $3.25 billion of notes due in 2031 with a 5.85% coupon and $3.25 billion due in 2033 at 6.25%, according to the regulatory filing cited by Channel NewsAsia. The dollar deal is the larger part of a cross-border fundraising that Meta expects to total at least $20 billion, with a first euro-denominated sale possible as soon as Wednesday, Bloomberg News reported.
Bids reached as much as $58 billion, about four times the amount on offer, according to Bloomberg News. The average peak order book for large dollar technology deals this year was 3.8 times, Invezz reported.
Demand did not come cheap. Pricing on Meta's longest notes, due in 2056, tightened to a spread of 2.2 percentage points over US Treasuries, still about 0.9 points wider than a comparable Meta bond sold in April, Invezz reported. The dollar notes mature between 2031 and 2056, and the euro tranches are expected to stretch to almost 38 years. Citigroup and Morgan Stanley are leading the sale.
Meta shares rose more than 2% on Tuesday, Invezz reported.
The sale follows a $25 billion bond issue in April that drew $96 billion of peak orders. Borrowing costs have risen across the sector since. Big Tech bonds trade at their widest yield premium to other investment-grade debt since 2003, and the cost of default protection on several large technology companies is near record levels.
Rivals are tapping the same market. Oracle raised $20 billion in bonds on Monday, Alphabet sold 6 billion euros of notes and Microsoft returned with a $25 billion dollar deal last week, Invezz reported. A group of hyperscalers and neocloud operators tracked by Bloomberg Intelligence is expected to spend nearly $4.5 trillion over three years, with Meta alone forecast above $740 billion.
Meta has also leaned on equity. It priced $25 billion of common stock and $12.5 billion of preferred shares last week and has outlined a programme to raise as much as $60 billion through at-the-market sales, taking the potential total toward $97.5 billion. S&P Global Ratings moved its outlook on Meta to negative on Oct. 30, forecasting free cash deficits of $39 billion this year and $71 billion in 2027.
Meta has guided to capital expenditure of $135 billion to $145 billion for the year.