Meta draws record demand in its first euro bond offering

Meta Platforms drew EUR53 billion in orders for its debut euro bond sale, a record for a corporate bond offering in Europe, Bloomberg reports. The company offered high yields to attract funding for its massive investments in AI.

Meta is seeking to raise EUR9 billion. The company is offering euro-denominated bonds in six tranches with maturities ranging from just over four years to more than 38 years, a person familiar with the matter told Bloomberg.

Meta’s spreads over mid-swaps are wider across all six tranches than those on euro-denominated bonds issued by other hyperscalers, Bloomberg reports. Meta is expected to price its 6.26-year tranche at 135 basis points over mid-swaps, versus 90 basis points for the six-year bonds Alphabet sold on Monday. The gap is wider at longer maturities.

This is Meta’s first bond sale outside of its home market. On Tuesday, the company sold dollar-denominated bonds, drawing as much as $58 billion in orders.

Big Tech is in one of its busiest stretches for bond issuance, Bloomberg reports. The race to fund massive AI investments has pushed hyperscalers to tap the debt market repeatedly. Meta, Microsoft, Oracle, and Alphabet have raised a combined total of just under $57 billion since late last week, according to Bloomberg.

At the same time, concerns about how quickly these companies are taking on debt and broader doubts about whether AI spending will pay off are driving up their cost of capital as investors demand better terms. Bloomberg estimates that the yields Meta offered are more typical of bonds rated several steps below Meta’s AA credit grade. The pattern extends across the sector. In the secondary market, Alphabet’s and Amazon’s euro-denominated bonds trade at spreads well above what their AA credit ratings would suggest, Bloomberg notes.

High energy prices have pushed government bond yields higher, putting further pressure on the sector.

The wave of bond sales comes as investors grow increasingly wary of spending on data centers, chips, and other AI infrastructure. It is also unclear how friendly Democrats will be toward Big Tech after winning control of both chambers of Congress in the U.S. midterm elections on Tuesday. Voter frustration over the vast data centers under construction across the country became a major campaign issue in several states where Republicans lost. Those include Texas, which accounts for around 30% of the U.S. data center capacity scheduled to come online in 2028, according to research firm SemiAnalysis, as cited by Bloomberg.