(Bloomberg) — Mark Zuckerberg’s Meta Platforms Inc. is set to seal an almost $30 billion financing package for its data center site in rural Louisiana, marking the final step for the largest private capital deal on record.
Blue Owl Capital Inc. and Meta will split ownership of the Hyperion data center site in Richland Parish, Louisiana, with the tech giant retaining just 20% of it, according to people with knowledge of the matter. To finance the build-out, Morgan Stanley arranged over $27 billion of debt and about $2.5 billion of equity into a special purpose vehicle — a structure for large deals that’s becoming increasingly common.
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The bank started to work on the deal earlier this year, with a flurry of asset managers and infrastructure lenders trying to get their foot in. Pacific Investment Management Co. and Blue Owl eventually won out, Bloomberg reported.
Spokespeople for Meta, Morgan Stanley, Pimco and Blue Owl declined to comment.
The financing is set to provide a roadmap for other hyperscalers looking to develop massive data center sites without harming their credit ratings, as firms go on borrowing binges to try to keep up with the costs. In the US bond markets alone, tech companies raised about $157 billion through late September — up 70% from that time last year, according to data compiled by Bloomberg.
Under the SPV structure, Meta is not borrowing the capital itself, the financing entity is. Meta, in turn, will be the developer, operator and tenant of the project, which will be completed in 2029, the people said.
The structure helps tech companies avoid placing large amounts of debt on their balance sheets and gives Wall Street investors the option to put money against physical assets, making them investment-grade. Structured investments are becoming more in demand as insurers and other types of investors search for debt tied to assets. Elon Musk’s artificial intelligence start-up xAI is pursuing a similar structure for its latest $20 billion fundraise, in which the firm just rents the chips instead of fully owning them.
On Oct. 16, the parties took the final step: they are set to price the bonds — in the 144A format — with Pimco as the anchor lender, said the people who declined to be identified as the details are private.
(Bloomberg) — Mark Zuckerberg’s Meta Platforms Inc. is set to seal an almost $30 billion financing package for its data center site in rural Louisiana, marking the final step for the largest private capital deal on record.
Blue Owl Capital Inc. and Meta will split ownership of the Hyperion data center site in Richland Parish, Louisiana, with the tech giant retaining just 20% of it, according to people with knowledge of the matter. To finance the build-out, Morgan Stanley arranged over $27 billion of debt and about $2.5 billion of equity into a special purpose vehicle — a structure for large deals that’s becoming increasingly common.
Most Read from Bloomberg
The bank started to work on the deal earlier this year, with a flurry of asset managers and infrastructure lenders trying to get their foot in. Pacific Investment Management Co. and Blue Owl eventually won out, Bloomberg reported.
Spokespeople for Meta, Morgan Stanley, Pimco and Blue Owl declined to comment.
The financing is set to provide a roadmap for other hyperscalers looking to develop massive data center sites without harming their credit ratings, as firms go on borrowing binges to try to keep up with the costs. In the US bond markets alone, tech companies raised about $157 billion through late September — up 70% from that time last year, according to data compiled by Bloomberg.
Under the SPV structure, Meta is not borrowing the capital itself, the financing entity is. Meta, in turn, will be the developer, operator and tenant of the project, which will be completed in 2029, the people said.
The structure helps tech companies avoid placing large amounts of debt on their balance sheets and gives Wall Street investors the option to put money against physical assets, making them investment-grade. Structured investments are becoming more in demand as insurers and other types of investors search for debt tied to assets. Elon Musk’s artificial intelligence start-up xAI is pursuing a similar structure for its latest $20 billion fundraise, in which the firm just rents the chips instead of fully owning them.
On Oct. 16, the parties took the final step: they are set to price the bonds — in the 144A format — with Pimco as the anchor lender, said the people who declined to be identified as the details are private.
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