The offering would help Meta, the only one among big
technology companies without debt on its books, to build a more traditional
balance sheet and fund some expensive initiatives, such as its metaverse
virtual reality.
Other tech giants such as Apple Inc and Intel Corp also
issued bonds recently, raising $5.5 billion and $6 billion, respectively.
In late July, Meta posted a gloomy forecast and recorded its
first-ever quarterly drop in revenue, with recession fears and competitive
pressures weighing on its digital ads sales.
The company announced its first-ever bond offering last
Thursday. The announcement came at a time when the social media company is
making massive investments to fund its virtual reality projects. Back then,
Meta did not disclose the size of the offering but said it would use the
proceeds for capital expenditures, share repurchases, acquisitions or investments.
The company received an 'A1' rating from Moody's and an 'AA-
rating' and a 'stable' outlook from S&P. Meta is selling four tranches of
bonds with maturities ranging from five years to 40 years.
It might also be a rare opportunity to do so relatively cheaply
in the current market environment. Corporate bonds have rebounded in the past
month after a rout earlier this year, as investors hoped the US Federal
Reserve's fight against inflation through rapid rate increases was starting to
have some impact. © Reuters
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