SpaceX raised $25 billion in a debt sale less than two weeks after its record initial public offering sent shockwaves through global markets.
The company had initially signaled plans to raise $20 billion through a senior unsecured notes offering, but surging demand pushed the final figure to $25 billion.
SpaceX received nearly $90 billion worth of orders, according to people familiar with the fundraising, reflecting enormous early appetite for the debt.
The bonds were priced across five tranches, with maturity dates ranging from 2031 to 2056, carrying rates between 5.35% and 6.65% respectively.
However, the offering quickly ran into difficulty once bonds began trading in secondary markets, raising questions about the quality of demand.
Paper losses on SpaceX’s $25 billion offering mounted since the debt began trading and totaled roughly $305 million as of late Thursday relative to Treasuries.
The longest-dated SpaceX bonds drew more skepticism than shorter-maturity ones, effectively erasing all the tightening from underwriters after orders swelled to nearly $90 billion.
Traders say the moves suggest fast-money accounts, rather than traditional buy-and-hold investors, piled into the deal looking to flip it for a quick profit.
A major trader offered SpaceX bonds maturing in 2056 at a spread that had widened by as much as 0.28 percentage points compared to the initial issuance, which priced 1.75 percentage points above U.S. Treasury rates.
Credit-default swaps tied to SpaceX bonds began trading actively this week, allowing investors to hedge against potential losses or speculate on the firm’s creditworthiness, creating broader two-sided market activity.
After weakening, SpaceX’s credit curve began trading more in line with that of similarly rated Oracle Corp. (ORCL), whose longer-dated bonds also widened soon after they were first sold.
On the equity side, SpaceX shares suffered a dramatic single-day decline of 16%, closing at $154.60, the lowest level since the company’s first trading day.
That drop extended a brutal three-day stretch that pushed losses to 23% and erased over $600 billion in market value, leaving the company’s capitalization just above $2 trillion.
Elon Musk, who briefly became the first person to top $1 trillion in personal wealth following SpaceX’s IPO, has seen his fortunes reverse sharply in recent weeks.
Bloomberg’s Billionaires Index now lists Musk’s wealth at $957.1 billion, a drop of nearly $360 billion from the high of $1.315 trillion hit in the days after SpaceX’s IPO.
The broader market backdrop added further pressure, with tech stocks dragging global indexes lower following renewed selling in chipmakers and a report that OpenAI could postpone plans to go public.
Two of China’s best-known hedge fund managers also added to the pessimism, warning that the artificial intelligence boom in global stock markets has become an unsustainable bubble.
SpaceX stated it intends to use the net proceeds to repay outstanding borrowings under its bridge loan facility in full, cover related fees and expenses, and apply any remaining funds toward general corporate purposes.
The deal nonetheless ranks among the largest bond sales of the AI era, a period that has seen Oracle raise $25 billion, Amazon (AMZN) raise roughly $54 billion, and Alphabet (GOOGL) pull in approximately $31.5 billion in bond sales across U.S. and European markets.
