BlackRock Issues $12.55 Billion Meta Data Center Bonds with a Yield of 7.534%

BlackRock has issued $12.55 billion in investment-grade bonds for Meta's data center project located in El Paso, Texas, with a yield of 7.534%, which is 287.5 basis points higher than U.S. Treasury bonds. The subscription size for the bonds was approximately $20 billion, only 1.6 times the issuance amount, which is lower than the average subscription level of about 4 times for bond issuances this year. Despite this, the higher yield attracted investors, and the yield spread of the bonds in the secondary market once narrowed to about 260 basis points above U.S. Treasury bonds. Recently, technology companies have been engaging in large-scale bond financing, and investors' capacity to absorb new AI-related debt has been squeezed, leading to weakened demand for newly issued bonds. The early performance of BlackRock's bonds contrasts with the recent issuance by SpaceX, which saw a decline in the secondary market, resulting in paper losses for investors.