Bond investors are looking for yields above 7% on the roughly $12 billion of senior secured notes financing Meta's El Paso AI data center, the Financial Times reported late Thursday — about 0.4 percentage points more than Meta paid on its last such deal. Pricing is expected as early as next week.
The structure
The notes are issued by Sopaipilla Investor LLC, the financing vehicle for a joint venture in which BlackRock holds 80% — through Global Infrastructure Partners and HPS — and Meta the remaining 20%. Meta leases the campus back on a 20-year term beginning in 2028, and the bonds are secured on that rent. The arrangement keeps the spending off Meta's capex line and onto its rent line. JPMorgan and Morgan Stanley are arranging.
The benchmark it is being priced against
In October, the Hyperion campus in Louisiana was financed through Beignet Investor LLC with $27.3 billion of amortizing senior secured notes at 6.581%, due 2049 — the largest private debt deal on record, structured the same way with Blue Owl at 80%. BlackRock itself bought more than $3 billion of it. Same sponsor, same shape, half a point cheaper, nine months ago.
The wider signal
Apollo chief economist Torsten Slok has tracked hyperscaler bond order coverage falling from roughly 5x in February to below 2x in July, while broad investment grade slipped only half a point — an AI-specific move. Amazon paid 18-21 basis points extra on the longest tranches of a $25 billion sale, on 2.5x coverage against 3.2x in March. Morgan Stanley projects roughly $570 billion of AI-related issuance globally this year.
What this is not
No AI data-center deal has been pulled, downsized or repriced after a failed marketing. Spreads remain near cycle lows by historic standards, and the El Paso notes have not priced yet. This is the market charging more for duration and structure, not refusing the asset class.