Meta's Jumbo Bond Sale Draws Record Orders, $125B

Watch Meta's Jumbo Bond Sale Draws Record Orders, $125B - Bloomberg on Dailymotion

Transcript

00:00So, Sarah, there is a divergence here between how the bond market is receiving

00:03Meta's latest results and how the equity market is interpreting it. You see the stock lower,

00:08but bond investors clearly love this jumbo bond sale. Help us make sense of that.

00:14Oh, Mark Zuckerberg must be feeling so validated right now. I mean, he was really getting a lot

00:20of skepticism from investors on his analyst call yesterday, saying that they're planning to spend

00:25even more. And of course, he's used to this. I feel like every quarter now, Zuckerberg says he's

00:30going to spend more than planned or more than expected. And investors in the past sometimes

00:36have rewarded that. But we seem to be getting to this point where there's a lot more anxiety,

00:40more fears of a potential bubble, and also fears that Meta, if it does overspend, doesn't have the

00:47ways to make something out of that investment the way that companies that have a cloud business or

00:54an enterprise business do. So, here comes this bond sale, and it's like record-breaking demand,

01:00showing that there really is a lot of thirst for exposure to AI infrastructure deals.

01:08And it's rare that this comes through on the public bond market like this.

01:13Right. And I'm glad you mentioned public bond market because Meta also sealed a $30 billion

01:17private credit deal just recently with Blue Owl. So, that's $30 billion in the private market,

01:23and now we're talking about what was originally thought to be $25 billion, but $125 billion of

01:28demand for public credit. And they can only do this, by the way, because they did that in a special

01:35purpose vehicle. Otherwise, it would be too much. So, the fact that they had that fancy financial

01:41engineering around that to keep it off balance sheet, to ensure that their credit rating would

01:46not be affected by that Blue Owl deal. Essentially, they're just paying rent instead of having debt.

01:55From an accounting perspective, that means they can go to the public markets and raise like this

02:00at such a huge raise. And Zuckerberg says, really, more to come. That was a very clear message on the

02:08earnings call yesterday. He said, 2026, expect us to spend even more.