SpaceX bankers kick off marketing for debut high-grade bond sale

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 US$75 billion IPO.

The company has commenced its inaugural offering of senior unsecured notes, “subject to market conditions and other factors”, it said in a filing.

The notes will be unsecured obligations of SpaceX and will rank equally in right of payment with all existing and future unsubordinated indebtedness, liabilities and other obligations, it added.

Elon Musk’s rocket, satellite and AI conglomerate is seeking to raise at least US$20 billion from the offering, Bloomberg reported last week. Proceeds will refinance a temporary bridge loan of roughly the same size, a facility that makes up the bulk of SpaceX’s US$29.1 billion of long-term debt.

The company has mandated Bank of America, Citigroup, Goldman Sachs Group, JPMorgan Chase & Co., and Morgan Stanley — the banks that provided the temporary bridge financing — to arrange calls with investors on Monday, according to a person with knowledge of the matter, who asked not to be identified because they’re not authorised to speak publicly. 

SpaceX received ratings in the BBB tier from all three major bond graders last week, paving the way for cheaper borrowing.

SEE ALSO

Singapore investors see SpaceX investment as a long-term bet on the future of the space economy

SpaceX bankers prepare for bond sale of at least US$20 billion

Elon Musk’s next move may be a megamerger of SpaceX and Tesla

SpaceX draws US$800 million from South Korean investors on trading debut

More

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

Moody’s Ratings and Fitch Ratings graded SpaceX’s debt at Baa1 and BBB+ respectively, or three steps above junk. S&P Global Ratings assigned a BBB rating, one notch lower. BLOOMBERG