SpaceX Kicks Off High-Grade Bond Sale

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech coming up. SpaceX is selling investment-grade bonds for the first time following its record-breaking IPO. We'll have the details. Plus Micron strikes an AI infrastructure agreement with Anthropic to drive enterprise AI adoption and a lot more. And Chevron signs a 20-year deal with Microsoft to power a West Texas datacenter. Could be one of the biggest in the US. Good morning. Monday, June 22nd, 2026 SpaceX's inaugural bond sale. This is about repaying their existing debt, funding corporate needs, and Bloomberg's reporting has been spot on. What we understand is that right now, you have the same banks they've been working with on their existing financing, going out, holding investor meetings, gaining, gauging appetite. But we believe that they'll look at maybe raising around $20 billion through this mechanism. By the way, the stock is down for a third straight session, down 10% this Monday, trading below $170 a share. Remember, this is an IPO that priced on June 12th, June 11th, traded June 12th, $135 a share. Now, why would a company sitting on $100 billion and more of cash need to tap the corporate debt market? Bloomberg Intelligence writing that, despite operational questions and considerable key man risk, they expect SpaceX's debt issue to be very warmly received. There's only one man for the job, Bloomberg Intelligence Senior Credit Analyst Robert Schiffman. That's the story, right? Why would a company that has $100 billion of cash on hand do this? Explain.

**Robert Schiffman** (2:02)
Well, I didn't think I could be more bullish, but every day I wake up and show up at Bloomberg, I'm more and more bullish on AI. And I think this deal is just going to support that.
Why do they need to raise more money? It's because over the next handful of years, they're probably going to spend a lot more than $100 billion. In fact, their free cash flow is probably going to be a lot more than $100 billion on the negative side. So they're going to need money because they're building the next hyperscaler business in space.

**Ed Ludlow** (2:32)
Let's go to the investor demand or appetite for this.
We had reported even prior to the IPO that SpaceX had managed to get investment-grade ratings from the three main agencies. And in your react, you basically say, this is how we think they'll stack up relative to their hyperscale peers who have a greater rating still. Why does all of that matter?

**Robert Schiffman** (2:53)
Well, listen, nobody owns SpaceX right now from the bond side. So there's going to be enormous demand. When you have an inaugural bond offering like this, it's going to be a feeding frenzy. And quite frankly, I think three quarters of the people who are going to buy the bonds aren't even going to know what this company does. It's going to be very much of a buy now, ask questions later. But what do they have supporting them? They've got very strong, stable investment grade ratings. You do not have to worry about this name going to junk. You've got perhaps the greatest investor of our generation, Elon Musk, who I think has replaced Warren Buffett.
And you have $100 billion of cash sitting on the books, plus tremendous upside across the diversity of businesses. My sense is if they raise $20 billion, you're going to have a book size that's well north of $100 billion.

**Ed Ludlow** (3:43)
You mean the demand, $100 billion of demand for $20 billion of supply. Just real quick, like trying to compare and contrast the equity story, the stock's down 9%, $167 a share. For the equity investor, they read the perspectives, they listen to Elon Musk and everything that's being pitched is very far into the future.
But is the kind of common denominator between the equity investor's approach and the credit investor's approach to SpaceX trying to understand the path for CapEx? Does it work the same way?

**Robert Schiffman** (4:13)
Listen, equity and credit are different. Equity is based on hope and future cash flows. Credit generally is based upon present cash flows and what leverage looks like right now. I actually do think that those are going to somewhat come together over time. This company is committed to reasonably low leverage, below three times. They're committing to having $25 billion of cash on the books for the foreseeable future.
And there's a hope of just absolute tremendous growth. Quite frankly, it's not so different than what Microsoft or Alphabet or Amazon is doing. And just remember, in the early days of names like Amazon, they lost a lot of money, too. You have to spend money to make money. This is what this company is doing. I think the bond market is going to be there to fund it. I think the equity market, when you start thinking about valuation, as all these AI revenues in particular come in. Remember, this company is going to transition from what is a satellite data business, an aerospace and defense business, to what's going to be a hyperscaler in the sky.