Facebook (Meta) Reportedly Offering $10 Billion Debt Bonds

U.S Senators Question Meta Over Prevention of Crypto Scams
  • Meta reported a free cash flow of $4.45 billion, down from $8.51 billion a year earlier.
  • Bond issuance is related to a decrease in free cash flow for the organization.

After a successful metaverse-based business model, Meta is planning to issue debt in order to support certain activities and sustain a healthy free cash flow for the long term. According to sources familiar with the matter, the corporation plans to issue $10 billion in bonds as part of its first-ever debt offering.

In reaction to the planned operation on Thursday, investors have offered $30 billion to benefit from this move. The bonds will be issued in a range of maturities, from five years to forty years, with the longer maturity seeing the most demand.

The product has reportedly been in development for the last two months, and Meta decided to announce it after issuing its most recent financial report in July. A1 from Moody’s and an AA- and a ‘stable’ outlook from S&P were the top ratings the corporation received from agencies.

An Aggressive Approach Towards Metaverse

Bond issuance is related to a decrease in free cash flow for the organization over the last year. Meta reported a free cash flow of $4.45 billion, down from $8.51 billion a year earlier. It has been reported that the bond issue would help the corporation maintain some of its activities, notably the development of its metaverse.

The corporation is spending a lot of money on R&D because of Meta’s aggressive push into the metaverse. Reality Labs, the company’s metaverse business, reported revenues of more than $400 million in the second quarter of 2022, but losses of more than $2.8 billion. Even the firm admitted that Reality Labs will continue to lose money in Q3 of this year.

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An engineering graduate who is passionate about writing and loves the very existence of crypto. Trading forex currency keeps me busy when I am not writing and analysing the crypto world.