As concerns grow over profitability due to expanded artificial intelligence (AI) investment, big tech firms including Meta, Oracle, and Alphabet are moving one after another to raise large amounts of funding.
Bloomberg News reported on the 2nd (local time) that Meta is considering issuing at least $20 billion (about 27 trillion won) in dollar- and euro-denominated corporate bonds.
A final decision has not yet been made, and the issuance size could grow depending on investor demand. Meta asked Citigroup and Morgan Stanley to hold investor conference calls for two days on the 2nd–3rd.
If the issuance goes through, Meta will once again move to a large corporate bond sale following April. In particular, this will be the first time it issues euro-denominated bonds. The dollar-denominated bonds will have maturities ranging from 5 to 30 years, and the euro-denominated bonds will be structured in a variety of terms from at least 4 years to more than 38 years.
In April, Meta also issued investment-grade corporate bonds to raise $25 billion. At the time, investor demand reached as much as $96 billion.
Software giant Oracle also plans to raise $20 billion for AI funding through bond and new share issuance. Citing Oracle’s materials, Reuters reported that the proceeds will be used for general corporate purposes such as capital expenditure, liability repayment, acquisitions, dividends, and share buybacks.
Of this, $10 billion in corporate bonds will consist of six tranches maturing between 2029 and 2046. Specific interest rates and offering prices have not yet been finalized.
Oracle said last week that capital expenditure is expected to peak in this fiscal year and next fiscal year. It also noted plans to raise up to an additional $20 billion in AI-related funding through the 2030 fiscal year.
Alphabet, Google’s parent company, began selling €6 billion (about 9 trillion won) in corporate bonds on the day. Earlier, when the issuance was being prepared, total demand exceeded €17 billion.
According to the underwriters’ plan and a U.S. Securities and Exchange Commission (SEC) filing, the bonds will mature in 2 to 19 years and comprise one floating-rate note and six fixed-rate notes. The offering price will be set on the day.
Alphabet issued a pound-denominated bond with a 100-year maturity in February and in May also issued a total of €9 billion in corporate bonds across six maturities.