Meta, the social media company, is planning to issue its first set of bonds to finance new investments and operations, according to reports. The company will be selling $10 billion in debt, to maintain a healthy cash flow and fund buybacks, per statements of two people with reported knowledge of the deal.
The operation, which was set to happen Thursday, has received a big response, with investors offering $30 billion to take advantage of this move. The bonds will have different maturities, going from five years to 40 years, with the majority of the demand being directed towards the latter.
Per source statements, the offering has been in the works for the last two months, with Meta deciding to launch it after releasing its latest earnings report in July. The company obtained satisfactory ratings from different agencies, getting an ‘A1’ rating from Moody’s and an ‘AA- rating’ and a ‘stable’ outlook from S&P.
The issuance of this bond has to do with the shrinkage of the free cash flow that the company has experienced during the last year. Meta had $4.45 billion in free cash flow, compared to the $8.51 billion the company had a year ago. Sources indicated that the bond offering will have the objective of giving the company more breathing room to keep funding part of its operations, including its metaverse initiatives.
What do you think about Meta’s $10 billion bond issuance? Tell us in the comments section below