Higher Borrowing Costs Emerge for Meta's Latest $12 Billion Data Center Funding

Deep News11:00

Meta Platforms, Inc. (NASDAQ: META) is facing increased borrowing costs for its latest $12 billion data center financing deal, as bond investors demand significantly higher yields compared to terms agreed upon just nine months ago, reflecting a market repricing of risks associated with artificial intelligence funding.

According to sources familiar with the matter, a data center project in El Paso, Texas, with a capacity of nearly one gigawatt, plans to issue bonds through a special purpose vehicle owned by BlackRock. Initial discussions indicate yields exceeding 7%.

Some investors are demanding a risk premium roughly 0.4 percentage points higher than the terms set for Meta Platforms, Inc.'s record-breaking $27 billion "Hyperion" data center bond transaction in October of last year.

The sources added that price discussions remain in their early stages and could change as early as Monday when the transaction is formally launched.

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