Meta is set to conduct a bond sale aimed at raising between $20 billion and $25 billion, with the proceeds primarily directed towards enhancing its artificial intelligence infrastructure and services. The bond issuance is expected to be composed of approximately two-thirds in U.S. dollars and one-third in euros.
This move follows a recent downgrade by S&P Global Ratings, which changed Meta's outlook from AA- stable to AA- negative, citing concerns over the company's significant capital expenditures and negative free cash flow.
In its latest earnings report, Meta disclosed that its capital expenditures for the year are projected to be between $135 billion and $145 billion, an increase from previous estimates. The company reported a negative free cash flow of $2.12 billion for the last quarter, a trend also seen in other tech giants like Alphabet and Amazon.
Meta's stock saw a 2.7% increase on the day of the announcement, recovering slightly after a challenging month where it experienced its worst performance in four years.
The bond sale is part of a broader strategy where Meta aims to raise a total of $95 billion to support its AI initiatives, including an initial $35 billion through public equity offerings and an additional $60 billion via an at-the-market program