SpaceX raises $25 billion in bond debut as AI expansion draws massive investor interest

SpaceX launches $25 billion notes offering, source says

June 23 (Reuters) - Elon Musk's SpaceX (SPCX.O), opens new tab has launched a five-tranche notes offering aimed at raising at least $25 billion, a source familiar with the matter said on Tuesday, as the newly public company seeks funding for its capital-intensive AI expansion. SpaceX's AI ambitions carry a hefty price tag, requiring tens of billions of dollars in investment in data centers, computing hardware ⁠and power infrastructure. The offering consists of 5-year, 7-year, 10-year, 20-year, 30-year tenor senior unsecured notes, according to a document seen by Reuters. Proceeds will be used to repay borrowings under its bridge loan facility as well as for general corporate purposes. The offering, which is SpaceX's first investment-grade dollar bond issuance, has drawn nearly $85 billion in ⁠orders, the source said. SpaceX did not immediately respond to a Reuters request for comment. Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Morgan Stanley are managing the sale, according ⁠to the document. Credit rating agencies assigned the company investment-grade ratings last week, signaling confidence in SpaceX's financial stability as it moves forward ⁠with its costly AI plans. The rockets-to-AI firm's shares rebounded on Tuesday, following a recent selloff tied to a ⁠broader tech pullback, after a blockbuster debut on June 12. Reporting by Nupur Anand in New York and Juby Babu in Mexico City; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab

SpaceX bankers prepare for potential $20 billion bond offering, sources say

June 18 (Reuters) - SpaceX's bankers are preparing to meet investors as early as next week to discuss a bond offering of at least $20 billion, two sources familiar with the matter said on Thursday, as Elon Musk's newly public company seeks funding for an ambitious and capital-intensive AI expansion. SpaceX's AI ambitions come with a steep price tag, requiring tens ⁠of billions of dollars in investment for data centers, computing hardware and power infrastructure. The offering would mark the first time the rockets-to-AI company has issued investment-grade dollar bonds. The size of the offering is not yet set and may change, the source said. Proceeds from the debt offering would refinance a $20 billion bridge loan that SpaceX took out earlier this year, after acquiring Musk's AI startup xAI in February. Bank of ⁠America, Citigroup, JPMorgan Chase, Goldman Sachs and Morgan Stanley provided the bridge financing and are expected to run the deal, one of the sources said. The rockets-to-AI company's valuation surged past $2 trillion following its blockbuster Nasdaq debut ⁠last week. Its shares soared in their first two days of trading before giving up some gains as investors assessed whether the company's rich valuation can ⁠be justified by its costly AI push. SpaceX, whose shares were down 6% in afternoon trading, did not immediately respond to a ⁠Reuters request for comment. Bloomberg News had reported the bond offering earlier on Thursday. Reporting by Juby Babu in Mexico City and Akash Sriram in New York; Editing by Anil D'Silva and Joyjeet Das Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Media & Telecom * Capital Markets Nupur Anand Thomson Reuters Nupur Anand is a U.S. banking correspondent at Reuters in New York. She focuses on JPMorgan Chase, Wells Fargo and regional banks. Anand covered banking and finance in India for more than a decade, chronicling the collapse of major lenders and turmoil at digital banks and cryptocurrencies. She has a degree in English literature from Delhi University and a postgraduate diploma in journalism from the Indian Institute of Journalism & New Media in Bangalore. Anand is also an award-winning fiction writer. Saeed Azhar Thomson Reuters Saeed Azhar is a Reuters financial journalist and part of the U.S. banking team, which covers Wall Street's biggest banks. He focuses on Goldman Sachs and Bank of America, and also writes about regional banks. Before moving to New York in July 2022, he led the finance team in the Middle East from Dubai, and also worked in Singapore, covering Southeast Asia finance.

SpaceX readies its $20 billion bond debut to fund AI ambition

SpaceX is selling investment-grade bonds for the first time in what's expected to be the start of a massive borrowing spree to fund the company's AI ambitions following its record $75 billion IPO. Banks including Goldman Sachs Group are arranging calls with investors on Monday, according to a person with knowledge of the matter, who asked not to be identified because they're not authorized to speak publicly. A bond sale is expected to follow, with maturities of between five and 30 years, according to the person. The planned note issue is highly unusual in the high-grade bond market, where investors typically lend money to established companies that make cars or sell life insurance. SpaceX hasn't been profitable, and according to a note last week from S&P Global Ratings is expected to burn cash through 2029. Much of what the company offers investors now is hope about future profitability. In an offering memorandum for the notes, SpaceX wrote, "Our mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars," echoing language in its stock prospectus. But for bond buyers, that may be a harder sale than for stock investors. Noteholders won't share in outsized profit if all goes well -- they will get their interest payments and at the end, their principal back. "Obviously it's something to get your head around and it takes a bit of a leap of faith," said Ross Pamphilon, fixed income chief investment officer at Impax Asset Management. SpaceX is seeking to raise at least $20 billion from the debt sale, it was reported last week. Proceeds will refinance a bridge loan of about the same size, a facility that makes up the bulk of SpaceX's $29.1 billion of long-term debt. Bond markets have been wide open for many companies investing in artificial intelligence now. Alphabet, Amazon and others have raised more than $300 billion of debt tied to AI since November across multiple credit markets, according to JPMorgan strategists, helping to drive near-record issuance this year. U.S. high-grade corporate bond sales are around $1.1 trillion, up 30% from the same time a year earlier. "The liquidity tap is certainly on and that's allowing companies to raise capital across many industries, from anything technology or semiconductor related to now even space related," said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments. Banks arranging calls with investors on Monday also include Bank of America, Citigroup, JPMorgan Chase and Morgan Stanley. Citigroup and JPMorgan declined to comment. SpaceX and the other banks didn't immediately respond to requests for comment. The company's shares fell as...