Meta looks to raise up to US$25 billion via bond sale, Bloomberg News reports

Meta Platforms is looking to sell between US$20 billion and US$25 billion of investment-grade bonds, Bloomberg News reported on Thursday, as the social media giant ramps up investments in artificial intelligence infrastructure.

The news follows a US$30 billion bond sale last year that was Meta's biggest ever. Like big tech rivals, Meta is increasingly tapping debt to fund its AI ambitions after for years relying on strong cash flows to fund expansion into new technologies.

A day earlier, it had raised its 2026 capital expenditure forecast by US$10 billion to a range of US$125 billion to US$145 billion. Overall, Big Tech is now expected to spend more than US$700 billion on AI infrastructure this year.

But the companies' growing appetite for debt has worried analysts and experts who have warned about a growing number of circular deals in the AI industry.

Meta had filed for a bond sale comprising six tranches earlier on Thursday, without disclosing the size. 

Initial price discussions for the longest portion of the deal, a note maturing in 2066, are for a yield of as much as 1.8 percentage point more than Treasuries, Bloomberg News reported, citing people with knowledge of the transaction. 

Meta did not immediately respond to a Reuters request for comment.

Rating agency S&P Global rated Meta's new debt investment-grade and maintained its stable outlook for the company’s ratings.

S&P analysts noted they expect Meta's leverage will remain "well below" the downgrade threshold for at least two years, but its massive investment in AI was "starting to affect credit metrics."

To help fund its spending push, Meta has scaled back on its long money-losing metaverse business. Reuters was also first to report that Meta is planning to lay off 20 percent or more of its workforce, with the first round of cuts, affecting half that number, set for May 20.

Reuters

 

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