Meta Platforms sold its first euro-denominated bonds on 4 November, raising 9 billion euros, as large technology companies pressed on with fund-raising for artificial intelligence infrastructure.
Reuters reported the sale from a lead manager memo seen earlier in the day, in a story carried by The Straits Times; the 9 billion euro figure, equivalent to S$13 billion, was reported by the IFR news service. Maturities on the multi-tranche sale ranged from four to 38 years.
The euro deal followed a US$15 billion five-part dollar bond offering on 3 November, as the Facebook parent turned to debt markets to help finance accelerating investment in AI infrastructure.
Citi and Morgan Stanley were the book runners, according to the memo and IFR.
Meta is the second large technology company to tap European bond markets this week. Alphabet sold 6 billion euros of bonds on 2 November in a sale that garnered strong demand, with an order book that topped 17 billion euros.
Issuing debt in foreign currencies allows companies to hedge the currency risk from their global assets while taking advantage of relatively lower borrowing costs in markets such as Europe.
Companies of this size have historically relied on strong cash balances to fund growth, so the current wave of AI-related fund-raising marks a departure. The money is being sought for data centres, computing capacity and cloud expansion.
The backdrop is less comfortable. Concerns about the financing required to support heavy spending on artificial intelligence, and the returns needed to justify that investment, have weighed on technology stocks and bonds in recent weeks. The tech-heavy Nasdaq fell 5 per cent in October.
The sale also followed the US midterm elections of 3 November, which Reuters reported had fuelled fears that rapid growth in the AI sector could be constrained by regulatory scrutiny. Meta's shares were up about 2 per cent on the morning of 4 November in New York.
Put together, the week produced an unusual set of readings. Doubts about the AI boom are described as growing. Over the same five days, two of the companies most exposed to it borrowed 15 billion euros in Europe and US$15 billion in New York, and one of those European sales was covered nearly three times over.
There are two ways to read an oversubscribed bond in a market full of misgivings, and only one of them is arithmetically available. If the lenders held the misgivings, the order book would have been thin. The order book was not thin.
Our analysts therefore propose that scepticism about the AI boom be reclassified as a demand indicator. On this week's evidence the appetite to lend rises with the stated level of concern, which makes concern the most reliable leading signal the sector has yet produced.
The Department of Unnecessary Research notes that the longest tranche of Meta's euro sale matures in 38 years, and that a lender content to be repaid in 2064 is making a fairly specific statement about the strength of its doubts.