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Meta Platforms raises $8.5 billion via its second-ever bond issue  

Meta Platforms raises $8.5 billion via its second-ever bond issue
Meta plans to use the fresh funds raised via bonds issue to help with finance capital expenditures, etc.

 

American tech major Meta Platforms has raised $8.5 billion in a bond offering divided into five parts, the company said in an SEC filing on Monday. This is Meta’s second issue ever after it raised $10 billion last year in its first-ever corporate bond issue.

According to the filing, the company raised $1.5 billion, $1 billion, $1.75 billion, $2.50 billion, and $1.75 billion via bonds maturing in 2028, 2030, 2033, 2053 and 2063. The parent of social media companies FacebookWhatsApp, and Instagram said the bond issue’s longest 40-year security could yield 192 basis points over the benchmark Treasury. The spread of other 2028, 2030, 2033, and 2053 notes with the benchmark U.S. Treasury was 95 bps, 120 bps, 135 bps, and 177 bps.

Meta plans to use the fresh funds raised via bonds issue to help with finance capital expenditures, repurchase outstanding shares of its common stock, and for acquisitions or investments. BofA Securities, J.P. Morgan Securities, Morgan Stanley, and Citigroup Global Markets (2028 Notes and 2033 Notes) were the book-runners on the deal.

According to a Bloomberg report, 11 companies came forward with the debt offerings on Monday as they looked to sell bonds before the Federal Open Market Committee’s interest rate decision due Wednesday. Hershey Co. and Comcast Corp. were some notable high-grade issuers who respectively sold $750 million and $5 billion in bonds.

The Mark Zuckerberg-led company reported its earnings for the first quarter of 2023 last week wherein profit and revenue beat expectations. “We had a good quarter and our community continues to grow,” Zuckerberg said at that time. “Our AI work is driving good results across our apps and business. We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision,” he added.

 

Despite a better January-March quarter, the social media behemoth has spent the last several months curtailing its costs via layoffs, etc. The Menlo Park, California-based company was reported earlier this week to lay off around 4,000 employees in its third round of mass job cuts. This follows the reduction of around 21,000 employees in the last six months by Meta. The company had previously announced to cancel lower priority projects, and reduce its hiring rates, among others, in its “year of efficiency” and as the tech major prepares for “the new economic reality.”

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