The world’s largest private debt offering, a bond series for one of Meta’s AI data centers, has slumped to its worst level since the deal priced at par last October.
As the Nasdaq composite closed at an all-time high on Tuesday in an AI-led rally, unease rose in the credit market for the industry.
The $27.3 billion bond financing Meta’s Hyperion AI data center traded down to a disconcerting 94.4 cents on the dollar, a record low. Worse, the loss coincided with Meta’s largest intraday stock rally in a year: 9%.
The bond series was the largest private debt offering ever sold. Corporate notes, backed by Mark Zuckerberg’s massive AI division at Meta, boasted a 6.581% coupon and a long-dated 2049 maturity.
PIMCO, the world’s largest bond manager, anchored the deal with about $18 billion. Funds by the world’s largest asset manager, Blackrock, bought upward of $3 billion.
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Technically, the debt sits on the books of Beignet Investor LLC, a special-purpose vehicle. A search for pricing of Beignet Investor LLC show latest pricing at 94.61 to 94.4, far below its 100 par.
In October 2025, S&P blessed Beignet Investor LLC’s AI bond with an A+ rating. It was within one rating level of regular Meta corporate bonds backed by Facebook, Instagram, and WhatsApp, and other divisions of Zuckerberg’s company.
Within days of its initial pricing, Beignet Investor LLC’s AI bond traded above par to as high as 110. By late July, it had fallen to about 96 cents. Today, it has retraced 14% of its peak gain.
PIMCO’s own GIS funds now mark it at 94.5, despite anchoring the initial offering.
An $18 billion position bought at par would now show a paper loss of roughly $1 billion.
The losses for bond investors contrast with Meta’s otherwise positive developments and stock performance. It launched Muse on September 8, a personal AI agent with free, $20, and $100 tiers.
Initial success was resounding, with Muse quickly topping Apple’s US App Store chart.
Goldman Sachs spent the session listing everyone the agent might disrupt. Businesses built on recurring bills — Goldman’s so-called “consumer inertia” basket like AT&T, Allstate, Netflix, or Booking.com — fell 2.6% on the day in the basket’s worst day since February.
Protos reported in July that credit default swaps on mega-cap AI names were blowing out.
Moody’s warned that the AI’s capital expenditures binge could dent the credit quality of even the largest AI companies.