Meta to Raise $25 Billion in Bonds as Cash Flow Turns Negative

Meta is preparing to tap debt markets for up to $25 billion, a move driven by surging costs for artificial intelligence infrastructure. The company plans to issue bonds on Tuesday, with final pricing expected by early afternoon.

Sources familiar with the transaction state the deal will be split between two currencies. Approximately two-thirds of the offering will be denominated in U.S. dollars, while the remaining one-third will be in euros. Meta declined to comment on the specific terms.

The bond sale follows a recent shift in the company's credit outlook. S&P Global Ratings lowered Meta's outlook from stable to negative this week. The agency cited uncertainty regarding the company's high capital expenditures and its current negative free cash flow position.

Financial data from the third quarter revealed that Meta expects full-year capital expenditures to range from $135 billion to $145 billion. This figure represents a $5 billion increase at the low end of prior guidance. The company reported a negative free cash flow of $2.12 billion for the latest quarter, a result shared by peers Alphabet and Amazon.

This is not the first major capital raise for Meta this year. The company secured $25 billion through a bond sale in April. Last week, it announced a broader plan to raise $95 billion to support its AI initiatives. This total includes $35 billion from underwritten public equity offerings and an additional $60 billion through an at-the-market program.

The stock market reacted cautiously to the news. Meta shares rose 2.7% on Tuesday. The gain comes after the stock fell in 12 of the previous 14 trading sessions, closing October with its worst performance in four years.