The largest private fundraising is coming! Meta to secure a $30 billion fundraising deal to build a data center

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According to media reports, Meta Platforms, owned by Mark Zuckerberg, is about to finalize a nearly $30 billion financing deal to build a data center in rural Louisiana, which will mark the closing of the largest private capital transaction in history.

Sources revealed to the media that Meta will co-own the Hyperion data center in Richland Parish, Louisiana with Blue Owl Capital Inc., with Meta retaining only 20% ownership. To finance the construction project, Morgan Stanley raised over $27 billion in debt and about $2.5 billion in equity for a special purpose vehicle (SPV). This structure is increasingly common in large-scale transactions.

Morgan Stanley began preparing for this deal early this year, attracting numerous asset managers and infrastructure lenders eager to participate. Ultimately, Pacific Investment Management Company (Pimco) and Blue Owl prevailed, with Pimco serving as the main lender according to media reports.

Analysts indicate that this financing will provide a template for other hyperscale data centers, allowing them to develop new facilities without negatively impacting corporate credit ratings. Facing soaring construction costs, many companies are resorting to debt expansion. Media compilations show that by the end of September this year, U.S. tech firms raised about $157 billion in the bond market alone, a 70% increase from the same period last year.

Under the SPV structure, the financing entity is the special vehicle itself, rather than Meta borrowing directly. Meta will serve as the developer, operator, and tenant of the project, which is expected to be completed in 2029. Sources say Meta will provide nearly $6 billion in construction funds through its 20% equity stake.

This structure helps tech companies avoid putting huge debts on their balance sheets and provides Wall Street investors with access to investments in tangible assets, granting investment-grade ratings. Currently, insurance companies and other investment institutions are increasingly favoring asset-linked structured investments. Elon Musk’s artificial intelligence company xAI is also adopting a similar model for $20 billion in financing—leasing chips through a financing vehicle rather than direct purchase.

Bond Sale Frenzy

This Thursday, all parties involved in the Meta project completed the final step: pricing the bonds in a 144A format. According to two sources, a few other investors also participated in the debt subscription. The bonds will mature in 2049 and will be fully amortizing. One source said the bond’s pricing is about 225 basis points above comparable U.S. Treasuries. Morgan Stanley exclusively underwrote the deal. S&P Ratings gave these securities an A+ investment-grade rating.

Another source told the media that by Friday morning, the price of these bonds had risen to 105% of face value. This is extremely rare in the investment-grade bond market; within just a few hours, at least $1 billion in bonds traded at a premium.

For Pimco, this deal is significant, as the company has long sought to move away from traditional public bonds. Earlier this year, the credit giant partnered with KKR to enter the asset-backed finance sector, acquiring nearly 10% of Harley-Davidson’s financial subsidiary and buying its retail loans.

The Hyperion data center spans about 4 million square feet, located in rural Louisiana, and is the largest among Meta’s 29 global data centers. Media analysis of government data indicates that the center’s total electricity demand at full capacity is expected to reach 5 gigawatts, equivalent to the consumption of 4 million American households. According to S&P, Entergy plans to provide up to 3 gigawatts of electricity to the Meta campus by December 2028 at the latest, provided the company completes substations, multiple transmission lines, and power plants on schedule.

As Meta’s transaction advisor, Morgan Stanley is actively expanding its influence in AI. In June, the bank also advised on xAI’s corporate debt financing and is currently marketing junk bonds for cryptocurrency mining company TeraWulf Inc. According to media, Morgan Stanley was involved in BlackRock's infrastructure investment team's $40 billion acquisition of Aligned Data Centers.

The Louisiana project is just one of Meta’s multiple large-scale data center projects. Earlier this week, the company announced plans for another gigawatt-level data center in El Paso, Texas, and is also building a large data center in Ohio.

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