Elon Musk’s SpaceX plans to tap debt markets to raise $20 billion after record IPO: Report
SpaceX is reportedly looking to raise $20 billion through a bond sale as early as next week, according to a report by Financial Times. The
SpaceX is reportedly looking to raise $20 billion through a bond sale as early as next week, according to a report by Financial Times. The planned fundraising comes just days after trillionaire Elon Musk's rocket company completed its blockbuster initial public offering (IPO). The company also secured BBB-range credit ratings from all three major rating agencies on Thursday, a development that should help lower borrowing costs and broaden investor interest. Meanwhile, the newly listed firm has mandated Wall Street banks to pitch the fixed-income deal to investors, the news publication reported, citing people familiar with the matter. One of the sources told FT that the 10-year debt offering is expected to be priced at around 1.35 to 1.5 percentage points above US Treasuries during initial discussions. Bond sale proceeds to be used in paying back loan Funds raised through the bond sale would be used to primarily refinance a $20 billion bridge loan that is scheduled to mature in September 2027, news agency Bloomberg reported.
The AI-to-rockets company took out the loan in March this year after its top executive Musk merged his debt-laden AI start-up, xAI, and social media platform X into the rocket company, another source told FT. SpaceX did not immediately respond to the news publication's request for comment. The final pricing and deal size of the bond sale will depend on market conditions, the sources added. Regulatory filings submitted ahead of the IPO show that the bridge loan represents the largest portion of the company's long-term borrowings. As of March 31, SpaceX had about $29.1 billion in long-term debt in its books, with the bridge facility accounting for most of the amount. The planned bond issuance marks another major step for SpaceX as it seeks to strengthen its balance sheet and secure long-term financing following one of the largest and most closely watched public offerings in recent market history, in which it raised $86 billion from retail and institutional investors.
SpaceX stock gives up most post-IPO gains as it falls 20% from its peak Investors who bought SpaceX shares in the open market following the company’s stock market debut last week have witnessed most of their paper profits being wiped out after a steep decline over the last two days. SpaceX shares dropped 3.6% on Thursday to close at around $184.98. Also Read | SpaceX shares slide for 2nd day as post-IPO volatility tests investor confidence After its public debut at $135 per share, SpaceX stock surged due to positive investor sentiment and moreover the enthusiasm surrounding the mega IPO, which drove its shares above $225 apiece during Tuesday’s session. Since reaching that high, however, the shares have fallen roughly 20%, giving back a large share of their post-listing gains. SpaceX ended Thursday’s trading session with a market capitalisation of about $2.4 trillion, making it the sixth biggest company in the world.
The BriefWire