Meta has begun marketing at least $20 billion of dollar and euro bonds to fund its AI infrastructure buildout, Bloomberg reported on Tuesday, returning to the debt market days after lining up one of the largest equity raises in corporate history.
The Meta $20B bond package would be the company’s first dollar bond sale in six months and its first-ever euro-denominated offering, according to the report, which cites people familiar with the matter. No final decision has been made, and the size could grow depending on investor demand.
Five Tranches, Up to 38 Years
The dollar notes are being marketed in five tranches with maturities of five to 30 years, Reuters reported, while the potential euro bonds would run from around four years to just over 38 years. Initial pricing guidance on the longest-dated dollar tranche puts its yield at about 2.5 percentage points above US Treasuries, Bloomberg reported, citing a person familiar with the sale.
Citigroup and Morgan Stanley held investor calls on Monday and Tuesday to line up demand for the offering. Meta last tapped the investment-grade bond market in April, when it raised $25 billion in a sale that drew a record $96 billion of orders.
The AI Debt Wave
Meta is one of several hyperscalers borrowing to pay for data centers. Big Tech’s recent AI bond raises top $85 billion, with Microsoft selling dollar bonds in late October and Oracle and Alphabet both pricing deals on November 2.
The borrowing follows Meta’s October 26 announcement of an equity fundraising plan of up to $97.5 billion, including common and preferred shares and a $60 billion at-the-market program. The company has also raised the lower end of its full-year capital spending forecast to $135 billion, with the top end at $145 billion.
Morgan Stanley CEO Ted Pick said the same day in Hong Kong that AI infrastructure could draw $10 trillion to $15 trillion over the decade, with hyperscalers spending $800 billion to $1 trillion a year, while Goldman Sachs CEO David Solomon said the constraint on deal size is the cost of capital, not its availability, The Inference reported.
Why It Matters
Meta is funding its AI buildout with everything at once: debt, equity and cash flow. The 2.5-point spread on a 30-year bond is the market’s price for lending against assets that mostly depreciate before they pay back. If demand matches April’s $96 billion order book, Meta could print well beyond $20 billion, adding another chapter to the biggest corporate borrowing spree in tech history.
Sources
- Bloomberg (via Economic Times): “Meta eyes at least $20 billion from potential bond offerings”
- Reuters (via AI Affairs): “Meta begins five-tranche dollar bond sale to finance AI infrastructure”
- TipRanks: “Meta Launches $20 Billion Bond Sale to Fund AI Expansion as Big Tech Debt Builds”
- PANews: “Meta Returns to Dollar Bonds, Plans to Raise at Least $20B in US and European Markets”
- The Inference: “Meta asks $20 billion at 2.5 points over Treasuries”
