Meta completes 20 trillion won bond sale as orders reach four times target

[Financial News] Meta Platforms raised $15 billion (about 20.1 trillion won) on the 3rd (local time) by offering dollar-denominated corporate bonds at higher interest rates.
Foreign media reported, citing sources, that investors placed orders worth $58 billion (about 77.8 trillion won), around 3.9 times the amount issued.
Among the five tranches, the one with the longest maturity, due in 2056 (30 years), was issued at an interest rate 2.2 percentage points higher than U.S. Treasury bonds of the same maturity.
That is 0.3 percentage points below the initially offered spread of 2.5 percentage points, but close to 0.9 percentage points higher than on similar bonds issued in April.
Meta is set to issue its first euro-denominated bonds as early as the 4th. Proceeds from the two bond offerings combined are expected to exceed $20 billion (about 26.8 trillion won).
Since last year, Meta has issued a cumulative $70 billion (about 93.9 trillion won) in dollar-denominated bonds. That ranks third among Big Tech companies, behind Alphabet Inc. and Amazon.
The issuance came after credit rating agency S&P Global Ratings downgraded its outlook on Meta's credit rating from “stable” to “negative” last week, citing pressure on the company's financial health.
Meta is also carrying out a major equity offering.
It recently completed offerings of $25 billion (about 33.5 trillion won) in common stock and $12.5 billion (about 16.8 trillion won) in convertible preferred stock, and is also planning an at-the-market (ATM) share sale of up to $60 billion (about 80.5 trillion won).
Bonds issued by Big Tech companies, including Meta, are trading at their widest spreads over other investment-grade bonds since 2003.
Craig Brothers, a senior portfolio manager at Bel Air Investment, said, “The bond market is trying to rein in companies by raising spreads, but it doesn’t seem to be having much effect. Hyperscalers (operators of large-scale data centers) are willing to pay higher spreads to raise funds.”
Earlier, on the 2nd, Oracle issued $10 billion (about 13.4 trillion won) in bonds, while Alphabet Inc. issued €6 billion (about 9 trillion won) in euro-denominated bonds. Both companies paid significantly higher interest rates to attract investor demand.

[email protected] Lee Seok-woo, International Affairs Correspondent Reporter