Meta hits market with six-part jumbo amid AI push
Meta Platforms hit the market with a six-part investment-grade offering on Thursday, just a week after a joint-venture partner sold a record-setting US$27bn bond to help fund the Facebook parent’s massive data center campus in Louisiana.
The Menlo Park, California-based issuer, which was last in the bond market in August, is out to investors with five, seven, 10, 20, 30 and 40-year senior unsecured notes. Initial price thoughts across the tranches are in the areas of 85bp, 105bp, 110bp, 120bp, 130bp and 140bp, respectively. Citigroup and Morgan Stanley are active bookrunners on the Aa3/AA– rated deal, which, according to CreditSights, could total over US$25bn.
“This deal is capturing the attention of all market participants,” Richard Cheng, head of Nuveen’s investment-grade corporate sector team, said Thursday morning. “It presents a good opportunity for investors to be involved in AI infrastructure.”
The fundraising, whose proceeds are earmarked for general corporate purposes, comes after Meta reported third-quarter earnings on Wednesday and forecast a significant increase in spending next year on infrastructure related to artificial intelligence, in line with its rivals in the AI race, Alphabet, Microsoft and Oracle.
“The bonds should price with healthy concessions given the magnitude of the increased AI spending as well as the $25+ bn indicated size,” CreditSights analysts wrote in a Thursday morning report.
Susan Li, Meta’s CFO, said during the earnings call with analysts on Wednesday that the company expects capital expenditure to be “notably larger” next year than this year.
“We also anticipate total expenses will grow at a significantly faster percentage rate in 2026 than 2025, with growth primarily driven by infrastructure costs, including incremental cloud expenses and depreciation,” she told analysts.
Expenses will grow 22%–24% year over year in 2025 to US$116bn–$118bn, Li said. Capex this year is expected to reach US$70bn–$72bn, she said, up from a prior estimate of US$66bn–$72bn.
CreditSights analysts said free cash flow “could be slightly negative in 2026 vs. prior consensus estimates of [about US$28bn] prior to the earnings call”. As a result, they said, proceeds from Thursday’s bond offering could be used to fund dividend payments of about US$5bn and share buybacks.
Meta’s last trip to the US high-grade bond market was on August 7, when it raised US$10.5bn via a five-part deal, its largest bond offering to date.
Yet investors got the clearest look at the fundraising required of Meta’s unprecedented AI ambitions on October 16, when its JV partner Blue Owl Capital raised more than US$27bn in what is the biggest single-tranche bond deal on record.
Proceeds from the deal, sole led by Morgan Stanley, along with US$2.43bn in equity from funds affiliated with Blue Owl and about US$1bn of interest income, will fund the buildout of the Louisiana facility that Meta CEO Mark Zuckerberg said will equal the size of midtown and lower Manhattan.