Meta sells $15 billion of dollar bonds in five parts, SEC filing shows; Bloomberg reports up to $58 billion of orders

Meta sold $15 billion of U.S. dollar bonds in five series on Tuesday, Nov. 3, according to a pricing term sheet the company filed with the SEC that evening. The notes priced on Nov. 3 and are expected to settle on Nov. 5, the filing shows. Citigroup and Morgan Stanley were the joint book-running managers, with Goldman Sachs, BofA Securities and J.P. Morgan as passive joint bookrunners.

The term sheet lists $3.25 billion of 5.850% notes due 2031 at 110 basis points over Treasuries, $3.25 billion of 6.250% notes due 2033 at 145 basis points, $4 billion of 6.550% notes due 2036 at 160 basis points, $1.75 billion of 7.350% notes due 2046 at 200 basis points and $2.75 billion of 7.500% notes due 2056 at 220 basis points. Yields to maturity run from 5.850% on the 2031 notes to 7.531% on the 2056 notes, according to the filing. It lists Meta’s ratings as Aa3 with a stable outlook from Moody’s and AA- with a negative outlook from S&P.

Those spreads are 20 to 30 basis points tighter than the initial price guidance Investing.com reported on Tuesday morning: 130 basis points for the five-year notes, 165 for the seven-year, 185 for the 10-year, 230 for the 20-year and 250 for the 30-year. Meta’s preliminary prospectus supplement, filed at 8:29 a.m. ET, had left the amounts, rates and maturity years blank.

Investors placed as much as $58 billion of orders, about 3.9 times the deal’s size, Bloomberg News reported, citing people familiar with the matter, in a figure Reuters relayed. Bloomberg said that ratio was roughly in line with the average peak book for major U.S. dollar tech bond deals this year. Reuters also reported the $15 billion five-part sale, citing the regulatory filing. Meta’s April bond sale raised $25 billion with peak orders of $96 billion, Quartz reported, citing Bloomberg.

Bloomberg has reported that the dollar sale is part of a cross-border plan targeting at least $20 billion across dollars and euros, including Meta’s first euro-denominated bonds, which could be sold as soon as Wednesday, Nov. 4, according to The Next Web and Investing.com, both relaying Bloomberg. CNBC reported on Tuesday afternoon, citing people familiar with the matter, that Meta aimed to raise $20 billion to $25 billion, about two-thirds in dollars and one-third in euros. As of 6:25 p.m. ET on Tuesday, none of Bloomberg, Reuters or CNBC had reported that a euro offering had launched or priced. The preliminary prospectus supplement says Meta “may launch an offering of euro-denominated notes,” with no assurance that it will, and that neither offering is conditioned on the other.

The bond sale follows Meta’s equity offerings announced in late October, which Reuters put at around $97.5 billion: about $37.5 billion of stock that Meta priced, and up to $60 billion more through an at-the-market share-sale program, according to Reuters. Meta’s Oct. 26 pricing term sheet shows that $37.5 billion as $25 billion of Class A common stock and $12.5 billion of mandatory convertible preferred depositary shares. Meta’s preliminary bond supplement adds that underwriters exercised their over-allotment option on the preferred in full, and that Meta issued 37.5 million additional depositary shares on Nov. 2 for net proceeds of about $1.869 billion.

S&P Global Ratings revised its outlook on Meta to negative from stable on Friday, Oct. 30, citing uncertainty around capital spending and free cash flow, CNBC and Reuters reported. CNBC said Meta reported negative free cash flow of $2.12 billion in the third quarter and expects full-year capital expenditures of $135 billion to $145 billion.

Investing.com said Oracle raised $10 billion through a bond offering on Monday, Alphabet raised 6 billion euros ($6.73 billion) in a euro-denominated sale, and Microsoft raised $25 billion last week.

Meta sells $15 billion of dollar bonds in five parts, SEC filing shows; Bloomberg reports up to $58 billion of orders

Sources