BlackRock gets soft demand for bond sale after AI debt sell-off

Published Sat, Jul 25, 2026 · 11:23 AM

[NEW YORK] BlackRock has seen weaker-than-usual demand for a corporate bond sale tied to a Meta Platforms data centre project in Texas, as investors grapple with concerns about excessive artificial intelligence infrastructure spending.

Final demand reached US$20 billion by late Friday (Jul 24) afternoon, or about 1.6 times the amount of bonds for sale, according to people with knowledge of the matter. Borrowers typically aim to generate demand multiple times the size of a bond offering to get optimal pricing. 

The US$12.3 billion bond is expected to be priced on Monday, the people said.

A flood of jumbo-sized debt sales by technology firms has stretched investors’ ability to absorb the supply, eroding appetite for new AI-related bonds. Amazon.com’s US$25 billion offering earlier this month finished with orders 1.6 times that amount, well below this year’s investment-grade average of four.

The market backdrop deteriorated further this week after Alphabet increased its 2026 capital spending forecast, reigniting concerns over whether massive AI investments will pay off. Risk appetite was also dented by a surge in oil prices amid the escalating war in Iran.

JPMorgan Chase and Morgan Stanley are managing the bond sale. JPMorgan declined to comment about the final demand, while Morgan Stanley, BlackRock and Meta didn’t respond to comment requests.

Sopaipilla Investor, a holding company tied to BlackRock, is selling notes due in 2048.

Pricing was guided at a premium of around 2.875 percentage points over 10-year Treasury yields, which is in line with earlier pricing discussions, said the people, asking not to be identified because they aren’t authorised to speak publicly. Companies typically lower borrowing costs through the syndication process.

Those levels are about 0.4 percentage point wider than where a Beignet note due in 2049 currently trades. The Beignet security, whose spread has widened more than 0.5 percentage point this month, was sold last year to help finance a Meta data centre in Louisiana. 

Proceeds will fund a data centre campus in El Paso, Texas that is expected to provide as much as 1 gigawatt of computing capacity for artificial intelligence workloads. BlackRock subsidiaries Global Infrastructure Management and HPS Investment Partners hold an 80 per cent stake in the project, with Meta owning the remaining 20 per cent.

Meta’s latest US bond offering, a US$25 billion deal in April, faced lacklustre demand and priced at higher spreads than six months earlier, when it raised US$30 billion. One of the notes sold in April, which is due in 2046, has seen its spread widen by 0.3 percentage point from where it priced.

The Sopaipilla transaction – named after a fried pastry popular in southwestern US – resembles a project finance loan. Such debt is issued by a special-purpose vehicle, the principal is gradually repaid over time and the obligations are backed by Meta’s lease commitments.

The structure allows Meta to raise the money off balance sheet, easing woes about excess borrowing, while making investors comfortable with the risk because the social media giant backs the debt through the data centre lease. 

Other technology firms have also tapped the format to fund AI infrastructure. 

Hut 8 last month raised US$4.25 billion to fund a Texas data centre leased to Nvidia. It also sold US$3.25 billion of bonds in April for a project that relied on a financial backstop from Alphabet’s Google, just a few weeks after Blackstone-backed QTS issued a US$4.6 billion note to fund Microsoft-tied project. BLOOMBERG