Meta Debt Issuance: Tech Giant Seeks Up to $25 Billion

Meta is attempting to raise between $20 billion and $25 billion through a bond sale on Tuesday. The company is increasing its expenditure on artificial intelligence infrastructure, models, and services. Sources familiar with the deal indicate the debt issuance will be split, with two-thirds denominated in U.S. dollars and one-third in euros. Final pricing is expected to occur by Tuesday afternoon.

The move follows a recent shift in investor sentiment regarding the company's financial trajectory. Days before this announcement, S&P Global Ratings changed Meta's outlook from AA- stable to AA- negative. The agency cited uncertainty surrounding the firm's high capital expenditures and negative free cash flow. In its third-quarter earnings report released last month, Meta projected full-year capital spending between $135 billion and $145 billion. This figure marks a $5 billion increase over the low end of its previous guidance.

For the most recent quarter, Meta reported negative free cash flow of $2.12 billion. This result places the company alongside Alphabet and Amazon, which also posted negative figures in their latest reports. The debt sale is part of a larger financial strategy to fund AI initiatives. Meta stated last week that it aims to raise a total of $95 billion. Of that amount, the company plans to raise $35 billion through underwritten public equity offerings and an additional $60 billion via an at-the-market program.

Meta previously closed a $25 billion bond sale in April. The company has declined to comment on the new transaction. Bloomberg News first reported on the plan. On Tuesday, Meta stock gained 2.7%. This rise followed a period of volatility where the shares fell in 12 of the previous 14 trading sessions. October marked the company's worst monthly performance in four years.