Facebook Parent Meta Secures $10 Billion in its Debut Bond Offering

As it attempts to finance share buybacks and investments to reform its business, Meta Platforms Inc., the parent company of Facebook, announced on Tuesday that it has raised $10 billion in its first-ever bond issue.

The selling would assist Meta, the only major technology company without debt, in creating a more conventional balance sheet and funding some pricey projects, such its virtual reality platform, the metaverse.

Apple Inc. and Intel Corp., two other IT behemoths, recently sold bonds as well, raising $5.5 billion and $6 billion, respectively.

With recession worries and competition pressures impacting on its sales of digital ads, Meta set a dour forecast and reported its first-ever quarterly revenue decline in late July.

Last Thursday, the business launched its first-ever bond sale. The news was made as the social media business was raising significant sums of money for its virtual reality initiatives. At the time, Meta indicated it would utilize the money raised for acquisitions, share repurchases, capital expenditures, or investments but did not specify the size of the offering.

Moody’s assigned the firm a “A1” rating, while S&P assigned it a “AA-” rating with a “stable” outlook. Bonds from Meta are being sold in four tranches, with maturities ranging from five to forty years.

In the current market climate, it might also be a rare opportunity to do so quite cheaply. After falling earlier this year, corporate bonds have since recovered as investors anticipated the US Federal Reserve’s aggressive rate increases to combat inflation were beginning to take hold.