Meta just sold its first-ever bonds in euros, and the order book is the number I keep coming back to.
Meta just sold its first-ever bonds in euros, and the order book is the number I keep coming back to. The deal was 9 billion euros (about $10.1 billion) across six tranches, with maturities from four to 38 years. Orders hit 62 billion euros, a record for a European corporate bond, per Bloomberg.
That is roughly 6.9 times the deal size. Reuters put the book at 53 billion, still close to six times covered. The previous record was Anheuser-Busch InBev's 31 billion about a decade ago.
The bonds were priced just below par, and on the first day of trading all six tranches were quoted above face value, per Bloomberg. Alphabet tapped the same market earlier this week with 6 billion euros and a book above 17 billion, and Bloomberg reported it had to offer higher yields than on its May deal to get there. Borrowing in euros also lets these companies hedge currency risk on global assets and tap relatively lower European rates.
What makes this interesting is the timing. The Nasdaq fell 2.9% on October 30 on worries about AI spending, leaving it 7.8% below its October 6 closing high, per Reuters.
The Democrats won both chambers in the midterms, and Meta's president has said he sees a tougher US environment for new data center projects. Bloomberg also notes Meta's spreads were notably wider than other hyperscalers, closer to bonds rated several notches below its own double-A rating.
My read: the skepticism about AI spending shows up in the price, and investors still want in. They are asking Meta to pay a little more, then committing tens of billions of euros to the trade. That tells me the doubt is real but negotiable.
Sources:
Straits Times (Reuters): https://www.straitstimes.com/business/companies-markets/meta-sells-first-bonds-in-euros-raises-eu9-billion
Yahoo Finance AU (Bloomberg): https://au.finance.yahoo.com/news/meta-euro-bonds-jump-first-092951297.html
Not financial advice. For informational and educational purposes only.
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