Meta announces $25 billion debt offering to fuel AI investments
Meta Platforms is planning a bond sale aiming to secure between $20 billion and $25 billion, commencing Tuesday. The proceeds will be directed towards expanding its artificial intelligence capabilities, including infrastructure, models, and related services.
The offering is anticipated to be split, with roughly two-thirds denominated in U.S. dollars and the remaining third in euros. Sources close to the situation, who requested anonymity due to confidentiality, indicated that final pricing is expected to be determined on Tuesday afternoon.
Meta has not provided an official comment regarding the bond sale. Bloomberg News initially reported on the company’s intentions.
The announcement follows a recent revision of Meta’s credit outlook by S&P Global Ratings, which downgraded the company from AA- stable to AA- negative. This change reflects concerns about the company’s substantial capital expenditures and current negative free cash flow.
Meta’s most recent earnings report revealed a projected full-year capital expenditure range of $135 billion to $145 billion, a $5 billion increase from earlier projections. The company reported a negative free cash flow of $2.12 billion in the last quarter, aligning with similar reports from Alphabet and Amazon.
Meta previously secured $25 billion through a bond sale in April. Last week, the company announced a broader plan to raise $95 billion, initially through $35 billion in public equity offerings and an additional $60 billion via an at-the-market program.
Meta’s stock experienced a 2.7% increase on Tuesday, marking a turnaround after a decline over 12 of the previous 14 trading days and concluding October with its poorest performance in four years.
Source
“Meta seeks to raise up to $25 billion in debt sale as AI spending jumps”
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