Locator: 49467META.
Locator: 49467LDC.
The data center is tracked here.
CNBC tends to ask daily how these large data centers are going to be funded.
Bonds.
BlackRock was among the biggest investors in the $27 billion private-debt deal backing construction of Meta Platforms’ data center in Louisiana, highlighting the scale of the artificial-intelligence buildout and its insatiable demand for capital.
BlackRock bought more than $3 billion of bonds issued last week to finance the data center, which is called Hyperio.
The project is
- 80%-owned by private-credit manager Blue Owl Capital OWL, and,
- Facebook parent Meta owns the remaining 20% stake.
The bond sale: the largest private-debt offering everS&P.
The credit-ratings firm S&P gave the bonds an A+, recognizing Meta’s role in backing for the project. But the debt yielded 6.58% at issue, a level more common in junk bonds.
Black Rock:
- the world’s largest asset manager in part because of its postcrisis bet that ETFs, which trade on exchanges like a stock and have certain tax advantages, would supplant mutual funds as the investment vehicle of choice for deep-pocketed and individual investors alike.
- BlackRock’s iShares funds alone manage more than $5 trillion in assets.
- A slice of BlackRock’s bond purchases went to its ETFs.
- An active high-yield ETF bought Hyperion bonds last week valued at $2.1 million by Monday, making it the fund’s largest investment by far, according to fund disclosures.
- A BlackRock total-return ETF holds about $1.2 million of the debt and a loan ETF owns about $651,000.
Pimco:
- the giant bond manager, was the biggest buyer, accounting for $18 billion.
The deal:
- the bonds were priced at face value of 100 cents on the dollar last week.
- by Monday, BlackRock’s funds had valued them at 110.2 cents, implying large paper gains for investors that initially participated in the transaction.
More:
- by issuing the debt through its venture with Blue Owl, Meta was able to finance the deal off of its balance sheet;
- Intel used a similar off-balance-sheet arrangement last year with Apollo Global Management to finance an $11 billion chip factory in Ireland.
When I see this picture, I see one investment opportunity! CAT!
CAT has had a bad couple of weeks (profit-taking) but has almost doubled its value in the last six months. Up 84% in the last six months:
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Disclaimer
Brief
Reminder
Briefly:
- I am inappropriately exuberant about the Bakken and I am often well out front of my headlights. I am often appropriately accused of hyperbole when it comes to the Bakken.
- I am inappropriately exuberant about the US economy and the US market.
- I am also inappropriately exuberant about all things Apple.
- See disclaimer. This is not an investment site.
- Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.
- All my posts are done quickly: there will be content and typographical errors. If something appears wrong, it probably is. Feel free to fact check everything.
- If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.
- Many posts are not proofread for several days after they've been posted.
- Reminder: I am inappropriately exuberant about the Bakken, US economy, and the US market.
- I am also inappropriately exuberant about all things Apple.
- And now, Nvidia, also. I am also inappropriately exuberant about all things Nvidia. Nvidia is a metonym for AI and/or the sixth industrial revolution.
- I've now added Broadcom to the disclaimer. I am also inappropriately exuberant about all things Broadcom.
- And Oracle.
- Longer version here.
