Meta Platforms (NASDAQ: META) is preparing to raise $12 billion through a BlackRock (NYSE: BLK)-backed special-purpose vehicle to fund a nearly one-gigawatt data center in El Paso, Texas.
Bond investors are demanding higher yields on the new financing than they accepted just nine months ago, according to a report by the Financial Times.
Early discussions indicate investors are seeking yields above 7%, roughly 0.4 percentage points higher than Meta secured during its record $27 billion “Hyperion” financing completed last October.
Pricing could still change before the deal formally launches, which is expected as early as next week, the Financial Times reported.
A 0.4 percentage-point increase may appear modest, but at this scale the implications are substantial, with the higher yield potentially translating into tens of millions of dollars in additional annual interest expense.
“When you’re selling tens of billions of bonds, even a 0.1-percentage-point increase in costs would lead to tens of millions of additional interest expenses every year,” one credit investor focused on investment-grade debt told the Financial Times.
“It’s very significant in the high-grade market,” the same investor added, underscoring how sensitive large-scale debt issuance is to even marginal yield movements.
The new vehicle, Sopaipilla Investor, will hold an 80% stake in the Texas project, with Meta retaining the remaining 20% interest.
The bonds are set to mature in 2048 and are backed by Meta’s 20-year lease commitment beginning in 2028, with renewal options every four years and significant penalties if Meta exits the project early.
Meta is not alone in turning to debt markets to fund its AI infrastructure ambitions, as Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT) and Oracle (NYSE: ORCL) have all pursued similar strategies.
In February, Alphabet issued $20 billion of bonds, including a rare 100-year sterling bond, to help finance its expanding AI infrastructure plans, and has since raised its 2026 capital expenditure guidance to $195 billion to $205 billion.
Capital spending during Alphabet’s June quarter doubled from a year earlier to $44.9 billion, bringing total spending for the year to nearly $78.6 billion.
Combined, Alphabet, Amazon, Meta, Microsoft and Oracle issued approximately $121 billion of bonds during 2025, compared with roughly $40 billion in 2020.
Morgan Stanley expects global AI-related debt issuance to reach around $570 billion in 2026, with approximately $236 billion already priced by the end of May, roughly four times the pace seen a year earlier.
META shares edged 0.6% lower in pre-market trading Friday, and retail sentiment on Stocktwits remained in bearish territory, with the stock down more than 8% year-to-date and over 15% in the past 12 months.
