Meta pours money into AI investment ... plans up to $25 billion in corporate bond issuance

【Financial News, New York — Correspondent Lee Byeong-cheol】 Facebook parent Meta Platforms is moving to issue up to $25 billion in corporate bonds to expand investment in artificial intelligence (AI) infrastructure. With capital expenditures this year set to reach as much as $145 billion, it is also seeking to raise an additional $95 billion through a stock offering. Although massive AI investments have pushed free cash flow into the red and prompted a downgrade to its credit outlook, Meta appears set to continue its aggressive investment drive.
On the 3rd (local time), CNBC reported that Meta was seeking to issue $20 billion to $25 billion in corporate bonds that day. The proceeds are expected to go toward building infrastructure, including AI data centers, and developing AI models and services.
About two-thirds of the total issuance will be raised in U.S. dollars, with the remaining third in euros. The final pricing and terms are expected to be determined that afternoon. Meta declined to comment on its bond issuance plans.
The large bond offering by Meta is drawing attention because it is being pursued just days after international credit rating agency S&P Global Ratings lowered its credit outlook.
On the 30th of last month, S&P affirmed Meta’s credit rating at “AA-” but lowered its outlook from “stable” to “negative,” citing growing uncertainty over massive capital expenditures and deteriorating free cash flow. A negative credit outlook means the likelihood of a future credit rating downgrade has increased.
In its third-quarter results announced last month, Meta forecast that capital expenditures this year would reach $135 billion to $145 billion. The company raised the lower end of its previous forecast by $5 billion, showing that spending on AI infrastructure continues to grow.
Massive investment spending is also weighing on cash flow. Meta recorded a $2.12 billion deficit in free cash flow in the third quarter. With Meta following Alphabet and Amazon into negative free cash flow, the impact of Big Tech companies’ AI investment race on their financial metrics is growing.
Meta has already been pursuing large-scale external financing this year. It raised $25 billion through a bond issuance this past April and unveiled plans last week to issue a total of $95 billion in stock to fund its AI business.
Of the planned stock issuance, $35 billion will be raised first through an underwritten public offering, with the remaining $60 billion to be raised through an ATM (At-the-Market) offering, which involves selling shares periodically depending on market conditions.



[email protected] Correspondent Lee Byeong-cheol Reporter