SpaceX's $40 Billion Financing Plan Faces Obstacles, May Affect Credit Rating
SpaceX's plan to raise $40 billion through a special purpose vehicle (SPV) to purchase NVIDIA chips has encountered obstacles. Sources reveal that SpaceX aims to move the related liabilities off its balance sheet to protect its investment-grade credit rating, but recent turmoil in the credit markets has driven up borrowing costs in the industry, complicating financing pricing negotiations. The financing plan is expected to be divided into three tranches of 144A bonds, with the subordinated portion sized between $25 billion and $30 billion, and the other two tranches being $10 billion and up to $5 billion, respectively. SpaceX reported strong performance in the third quarter of this year, with its AI business achieving profitability for the first time and increasing revenue by selling computing power from its Memphis data center to external AI labs and large cloud service providers. Last year, SpaceX attempted to raise up to $20 billion in off-balance-sheet debt for Elon Musk's AI company xAI, but auditors determined that the transaction did not meet accounting treatment requirements, resulting in approximately $13 billion of debt being included on SpaceX's own balance sheet. SpaceX's Chief Financial Officer Bret Johnsen expressed confidence in continuing to finance prudently while maintaining its investment-grade credit rating.
-- Price
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