SpaceX Bonds Draw 130 Trillion Won in Orders...Wall Street Says Long-Term Outlook Still Uncertain

[Financial News] SpaceX, which had already electrified Wall Street with the largest initial public offering (IPO) in history, scored another success with its first bond sale, drawing more than 130 trillion won in orders. But unlike stock investors, bond buyers were not willing to bet blindly on the company's future growth. Demand was concentrated in relatively safe short-term debt, while longer-dated bonds carried a risk premium as investors demanded higher yields than those offered by rival companies.
On the 23rd local time, SpaceX issued $25 billion, or about 38.4 trillion won, in corporate bonds through five senior unsecured tranches with maturities of five, seven, 10, 20 and 30 years.
Orders reportedly reached between $85 billion and $90 billion, or about 130.6 trillion won to 138.2 trillion won. BofA, Citigroup, JPMorgan Chase & Co., Goldman Sachs and Morgan Stanley served as joint lead managers.
On the surface, the deal was a hit, but the bond market took a more cautious view. Investor demand was concentrated in the shortest-dated bonds. By contrast, the yield on the 10-year bond was set 0.5 percentage point higher than Intel's corporate bonds with the same credit rating. That reflected confidence in SpaceX's growth prospects, but also concern over its long-term credit risk.
The bond sale is intended to refinance existing bridge loans and raise funds for expansion in the Artificial Intelligence (AI) business. SpaceX plans to invest tens of billions of dollars in data centers, computing equipment and power infrastructure over the coming years.
The problem is the sheer scale of the investment. S&P Global Ratings said SpaceX is likely to remain in cash burn mode through 2030. It forecast that revenue will rise, but capital spending will outpace it. Standard & Poor's also said the company may need to slow the pace of investment or raise additional equity to maintain its credit rating.
Brett Kozlowski, portfolio manager at GW&K Investment Management, said, "If you ask whether this is an investment story of 'just believe in it for now,' I think the answer is yes."
Before the bond sale, SpaceX disclosed that as of the 19th it held more than $100 billion in cash and cash equivalents.
Meanwhile, SpaceX shares closed at $156.11 on the day, up 0.98% from the previous session. The stock had surged as high as $165.50 during trading before giving back part of its gains. It marked a rebound after three straight days of declines following the IPO, which erased about $600 billion in market value. The current share price is 15.6% above the offering price of $135. SpaceX's market capitalization stood at $2.05 trillion.

km@fnnews.com Kim Kyung-min Reporter