Meta set to raise $10 billion in its first bond offering

The offering reportedly received over $30 billion of orders from investors

Facebook-parent Meta Platforms Inc. is set to raise $10 billion in its first-ever bond offering on Thursday, as it looks to fund share buybacks and investments to revamp its business, according to two sources close to the deal.

The offering, which included bonds with maturities ranging from five years to 40 years, received over $30 billion of orders from investors, the sources said. They added the demand was skewed towards the longer-dated bonds.

Among big technology companies, Meta had been the only one that did not have debt on its books. Tapping the market now would help it build a more traditional balance sheet. That could give it more financial room as it tries to fund some expensive initiatives, such as its metaverse virtual reality and Reels short video product, at a time its cash pile is depleting, the sources said.

The sources, who declined to be named as they were not authorised to speak publicly, said Meta started working in earnest on the offering over the last couple of months.

It decided to launch the offering after releasing earnings late July, they said. The varying maturities of its offering would give it more funding options in the future, they added.

A recent resurgence in corporate bond markets over the past month after a rout earlier this year amid uncertainty about interest rates gave Meta a window to tap the market now, the sources said.

Hoping the U.S. Federal Reserve's fight against inflation through aggressive rate increases was starting to have some impact, investors have rushed back into the bond market.

This week has been one of the busiest of the year, with U.S. investment grade companies raising nearly $60 billion in primary bond markets, according to Informa Global Markets data.