SpaceX announced the start of a bond offering. What about its stock?
For now, the debt securities are being offered only to qualified institutional buyers
The bond offering is expected to mark the start of a large-scale campaign by SpaceX to raise the funds needed to finance the company's ambitious AI projects, according to Bloomberg / Photo: Sundry Photography/Shutterstock
Elon Musk’s aerospace and AI company SpaceX, which went public on June 12, announced its first issuance of unsecured investment-grade bonds. This is expected to mark the beginning of a large-scale campaign to raise the funds needed to finance the company’s ambitious AI projects, according to Bloomberg.
For now, the bonds are being offered only to qualified institutional buyers. Last week, the agency’s sources reported that the size of SpaceX’s bond offering would be at least $20 billion. The proceeds from the offering will be used to refinance a $20 billion bridge loan maturing in September 2027. This loan accounts for the bulk of SpaceX’s long-term debt, which stood at $29.1 billion as of March 31.
SpaceX is expected to issue bonds with maturities ranging from five to 30 years, a Bloomberg source familiar with the situation said in response to the company’s latest statement. The source also noted that Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley—which provided Musk’s company with temporary bridge financing—plan to hold talks with potential investors as early as June 22.
SpaceX also disclosed its financial figures in a statement: as of June 19, it had approximately $100.8 billion in cash and cash equivalents on hand.
What about the stocks?
During trading on June 22, SpaceX shares plummeted by 7.5% to $171 per share. Nevertheless, they are still trading at a premium of more than 25% relative to their IPO price.
Context
SpaceX made its debut on the Nasdaq on June 12 following a $75 billion IPO—the largest in stock market history—making it one of the most valuable companies in the United States.
Shortly before its stock market debut, Bloomberg sources learned that the company had received investment-grade ratings from the three largest rating agencies: Moody’s Ratings and Fitch Ratings assigned SpaceX’s debt ratings of Baa1 and BBB+, respectively (three notches above “junk” status); S&P Global Ratings assigned a BBB rating—one notch lower. Such ratings could allow the company to secure cheaper financing in the public debt market, Bloomberg noted. The rating agencies themselves did not confirm this information.
This article was AI-translated and verified by a human editor
