Meta is seeking to raise between $20 billion and $25 billion in a bond sale to fund its artificial intelligence buildout, launching a multi-part dollar offering on Tuesday alongside what would be its first euro-denominated debt, according to Bloomberg and CNBC reporting.
The sale, arranged by Citigroup and Morgan Stanley after investor calls on November 2 and 3, is expected to be roughly two-thirds dollars and one-third euros, with final pricing expected on Tuesday afternoon. A preliminary prospectus supplement filed with the US Securities and Exchange Commission launched the five-part dollar sale, leaving size, interest rates and maturities blank, and said Meta may launch euro-denominated notes at about the same time. Meta declined to comment.
Investors pile in despite the spending worries
Demand was strong. Investors placed orders worth up to $58 billion for the dollar offering, roughly four times the proposed size, Bloomberg reported, and pricing on the longest-dated notes, due in 2056, tightened to a yield premium of 2.2 percentage points above US Treasuries. Meta shares rose more than 2 percent on Tuesday.
The dollar bonds carry maturities of five to 30 years, while the euro-denominated notes are expected to include maturities stretching to nearly 38 years. The deal would be Meta's first high-grade bond offering since a $25 billion sale earlier this year, which drew peak demand of $96 billion.
A $95 billion funding plan — and a ratings warning
The borrowing is one piece of a much larger funding push. Last week Meta said it plans to raise $95 billion for its AI initiatives: $35 billion through underwritten public equity offerings, followed by $60 billion through an at-the-market programme. At September 30 the company already had $84 billion of bonds outstanding, all of them in dollars until now.
Days before the sale, S&P Global Ratings kept Meta's AA- credit rating but changed its outlook to negative, citing uncertainty around heavy capital spending and negative free cash flow. Meta's third-quarter free cash flow was about negative $2.12 billion, and the company now expects full-year capital expenditure of $135 billion to $145 billion, funding data centres, chips and AI models.
Big Tech's debt wave
Meta is far from alone in turning to the bond market. Oracle raised $20 billion through a bond sale on Monday, Alphabet secured 6 billion euros through a euro-denominated offering, and Microsoft returned to the US investment-grade bond market last week with a $25 billion transaction. All of it is aimed at the same thing: data centres, advanced semiconductors and the infrastructure the AI race demands.
Some of the world's biggest financiers are urging caution. Blackstone and Pimco pressed for more equity financing at the Global Financial Leaders' Summit, warning about lender concentration as AI-related debt piles up into the high hundreds of billions. For investors, the question is the same one hanging over the whole AI buildout: whether the spending turns into revenue fast enough to carry the debt.
By Hamza Faisal
