The social-media behemoth, which reported earnings last
week, is looking to raise $7 billion in a five-part deal, according to a person
familiar with the matter. The longest portion of the offering, a 40-year
security, may yield 215 basis points over Treasuries, the person said.
Eleven companies have already come forward with bond
offerings Monday as companies look to issue debt before the Federal Open Market
Committee meeting and subsequent rate decision Wednesday.
Meta raised $10 billion in its first ever corporate bond issue last
year. The Facebook parent plans to use the fresh funds to help finance capital
expenditures, repurchase outstanding shares of its common stock, and for
acquisitions or investments, the person add9ed.
The Menlo Park, California-based company has spent the last
months cutting costs and restructuring its workforce, while advertising sales
rebounded in the first quarter. Even though it touts strong cash flow, the
company is likely looking to shore up extra cash for future bond buybacks,
according to Bloomberg Intelligence analyst Robert Schiffman.
“After it boosted repurchase authorization by $40 billion in
January, we envision shareholder returns will keep growing — similar to
Alphabet and Apple — as free-cash-flow prospects improve,” he wrote in a note.
“With initial price talk wide to peers, we perceive little credit risk and
strong relative value out the curve.”
Representatives for Meta did not immediately respond to a request for comment.