Business News

Meta’s first-ever corporate bond deal sees $30 billion in demand despite Zuckerberg’s gloomy warning


Corporate bond investors appeared pretty bullish on the metaverse Thursday, or at least about digital advertising.


Published: August 4, 2022, 2022 at 3:46 p.m. ET
Author: Joy Wiltermuth
Original Source: www.marketwatch.com





Meta Platforms Inc. META, +1.05%, the parent of Facebook, on Thursday saw roughly $30 billion in demand for its debut $10 billion, four-part U.S. corporate bond deal, according to a person with knowledge of the dealings and Informa Global Markets.

That’s a big deal. While Meta reported its first-ever drop in revenue in the second quarter, investment bankers still were able to pull in price talk on each class of A1- to AA-rated bonds from the social-media giant.

That all but assured Meta, which also has Instagram and WhatsApp under its umbrella, could secure cheaper debt than was proposed only a few hours prior.

Meta declined to comment beyond a public filing for the debt offering.

Pricing on the company’s five-year class was 75 basis points above the risk-free Treasury rate, down from an initial range of 90 basis points, according to Informa Global Markets.

The 10-year class fetched 115 basis points above the TMUBMUSD10Y, 2.686% benchmark. That represents a premium to the roughly 86-basis-point spread on similar 3.6% coupon bonds trading on Thursday from retail giant Amazon AMZN, +2.19%, according to BondCliq data.

Tech giant Apple Inc. AAPL, -0.19% raised $5.5 billion in the corporate bond market on Monday.

Early last week, Meta reported second-quarter earnings of $6.69 billion, or $2.46 a share, down from $3.61 a share last year, on sales of $28.82 billion, down from $29.08 billion a year ago.

“We seem to have entered an economic downturn that will have a broad impact on the digital advertising business,” Meta Chief Executive Mark Zuckerberg said in a conference call after the results were dropped.

Meta shares rose 1.1% on Thursday, but are still down 49% on the year so far, according to FactSet. The S&P 500 index SPX, -0.08% shed 0.1% Thursday, the Dow Jones Industrial Average DJIA, -0.26% lost 0.3%, while the Nasdaq Composite Index COMP, +0.41% rose 0.4%, as investors awaited Friday’s jobs report for any sign of weakness in the robust labor market, particularly as tech jobs have come under pressure. 

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Meta’s first-ever corporate bond deal sees $30 billion in demand despite Zuckerberg’s gloomy warning
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