Meta Platforms Inc. raised $15 billion in a five-part bond sale Tuesday, its latest trip to the capital markets to fund artificial-intelligence spending, and it had to pay noticeably more than it did in the spring to get investors on board.
The offering included $3.25 billion of notes due 2031 with a 5.85% coupon, $3.25 billion due 2033 at 6.25%, $4 billion due 2036 at 6.55%, $1.75 billion due 2046 at 7.35% and $2.75 billion due 2056 at 7.50%, according to a regulatory filing. The bonds settle Nov. 5. Citigroup and Morgan Stanley led the sale, and Moody’s rated the debt Aa3.
Bigger coupons, wider spreads
Orders peaked around $58 billion, close to four-fold the amount sold, in line with other large technology deals this year. But pricing was less generous to the issuer. The 30-year tranche landed about 2.2 percentage points over Treasuries after tightening from initial talk, almost 0.9 point wider than a comparable Meta bond sold in April, when the company raised $25 billion against roughly $96 billion of orders. The new 10-year notes yield well above the average for similarly rated companies.
Investors have been demanding extra compensation from the biggest AI spenders as their borrowing climbs. Microsoft sold $25 billion of bonds last week, and on Monday Oracle priced $10 billion of notes alongside a stock sale while Alphabet raised EUR6 billion in Europe.
Debt and equity together
The dollar deal is the largest part of a cross-border financing that could total at least $20 billion, with a debut euro offering from Meta expected as soon as Wednesday, according to people familiar with the plans. It follows an unusually large equity package last week, when Meta priced $25 billion of common stock and $12.5 billion of mandatory convertible preferred shares and outlined plans for an at-the-market program of up to $60 billion.
Meta expects capital spending of $135 billion to $145 billion this year, largely on AI data centers and chips. It had about $83.7 billion of debt at the end of September, and Moody’s said it expects the company to keep a net cash position despite the spending.
