SpaceX is preparing for a significant bond offering of at least $20 billion, marking its first foray into investment-grade US dollar bonds. This move comes shortly after its record-setting initial public offering. The primary purpose of this bond sale is to refinance a substantial $20 billion bridge loan that is set to mature in September 2027. This bridge loan currently constitutes the majority of SpaceX's $29.1 billion in long-term debt as of March 31.
Major banks including Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs Group Inc., and Morgan Stanley, who also provided the initial bridge financing, are expected to lead the bond deal. SpaceX has secured investment-grade ratings from three major bond agencies — Moody's (Baa1), S&P (BBB), and Fitch (BBB+) — which is anticipated to facilitate cheaper borrowing as the company continues to seek financing for its ambitious projects. These ratings, however, have been met with some skepticism in the market, with equity investors reacting negatively to the news.
The company's IPO raised $75 billion, yet its shares dropped about 8% over two sessions, indicating market concern about its future spending. SpaceX reported a net loss of $4.28 billion on revenue of $4.69 billion for the first quarter, compared to a net loss of $528 million on revenue of approximately $4 billion a year prior. Forecasts from S&P predict negative free cash flows through 2029, and Moody's has raised governance concerns due to Elon Musk's substantial voting power. Despite these concerns, the company had $100.8 billion in cash and cash equivalents as of June 19.
Proceeds from the bond offering will also be used for general corporate purposes, including investments in its capital-intensive AI and space infrastructure projects. SpaceX has secured significant future revenue through deals, such as a $30 billion agreement with Google for computing power until mid-2029 and a roughly $45 billion deal with Anthropic PBC over the next three years. Additionally, the company recently announced an agreement with Reflection AI worth up to $6.3 billion for computing capacity at its Colossus 2 data center.
