Facebook-parent Meta Platforms Inc. announced on Tuesday that it has raised $10 billion in its first-ever bond offering, as it considers funding share buybacks and investments to revamp its business.
The offering would benefit Meta, the only one in the company of big technology firms without debt on its books, to create a more traditional balance sheet and fund some expensive initiatives, such as its metaverse virtual reality.
It might also be a rare opportunity to do so relatively economically in the current market environment. Corporate bonds have rebounded in the earlier month after a retreat earlier this year, as investors expected the US Federal Reserve’s battle against inflation through rapid price surges was beginning to have some impact.
Other tech giants such as Apple Inc. and Intel Corp also issued international bonds recently. Apple has issued $4.7 billion to accelerate progress toward the organization’s objective to become carbon neutral across its supply chain by 2030. Intel stated that it is part of a $6 billion overall public offering, the green bond will support its investments in sustainable operations.
In late July 2022, the Facebook parent company posted a gloomy forecast and recorded its first-ever quarterly drop in revenue, with recession fears and competitive pressures weighing on its digital ads sales.
Its free-cash flow has been depleting as it charges forward with its metaverse strategies, which headed the change in its name to Meta Platforms from Facebook in October 2021.
The company posted its first-ever bond offering last Thursday. The announcement came at a moment in time when the social media company is making enormous investments to fund its virtual reality projects. Back then, Meta did not disclose the size of the offering but stated it would use the proceeds for capital expenditures, acquisitions, investments, or share repurchases.
JPMorgan Chase, Morgan Stanley, Barclays, and Bank of America are managing Meta’s bond offering.
This shift by Meta concluded its lead as one of the few debt-free S&P 500 companies, as it received an A1 rating from Moody’s Investor Service and an AA- rating and a stable outlook from S&P Global Ratings. The Facebook parent company is selling four tranches of bonds with maturities varying from five years to 40 years.
About Meta
At Meta, the team is constantly iterating, solving problems, and working together to connect people across the globe. It is essential that the workforce reflects the diversity of the people the company serves. Hiring people with diverse backgrounds and points of view helps the company make better decisions, build better products, and create better experiences for everyone. Meta, the new company brand was introduced on October 28,2021, founded by Mark Zuckerberg. Headquartered in California, their offices are spread across 80+ cities worldwide including North America, Latin America, Europe, Middle East, Africa, and Asia Pacific, with 21 data centres globally.