BlackRock issues $12.55 billion Meta Data Center Bond with a yield of 7.534%

BlockBeats News, July 28th, according to Bloomberg, BlackRock's $12.55 billion investment-grade bonds issued for Meta's El Paso, Texas data center project saw an increase in early trading on Monday. The bond was issued at a yield of 7.534%, 287.5 basis points higher than U.S. Treasuries, a yield level more commonly seen in the high-yield bond market.

During the issuance phase, the bond had a subscription of around $20 billion, only 1.6 times the issuance size, significantly lower than the average subscription level of around 4 times for bond issuances this year. However, the higher yield eventually attracted investors, narrowing the bond's yield spread in the secondary market to around 260 basis points above U.S. Treasuries, lower than the 287.5 basis points at issuance.

In the recent period, tech companies have been engaging in large-scale bond financing, and investors' capacity for absorbing new AI-related debt has been squeezed. Previously, there was a sell-off of tech bonds, and companies like Alphabet continue to increase capital expenditures and may further issue debt, weakening market demand for new bond issuances.

BlackRock's bond's early performance contrasts with recent issuances by companies like SpaceX. After completing its first investment-grade bond issuance in June, SpaceX's related bonds declined in the secondary market, with investors facing significant mark-to-market losses at one point.