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Meta is ending an era of being a major debtless firm as it launches its first-ever bond offer. The company is hoping to continue funding its investment campaign, including the Metaverse. The social media giant raised $10 billion with the bond debut, which was sold in four parts. The largest portion of the offer was a 40-year security yielding 1.65 percentage points above the U.S. official treasury bond.
One of the reasons behind Meta’s first bond offering was financial trouble. In the second quarter of the year, the company saw considerable losses in its metaverse-VR division, Reality Labs, while Meta’s stock price and cash flow have been falling in the last few months.
The company reported $4.45 billion in free cash flow from the second quarter of 2022, compared to $8.51 billion in the same quarter of 2021.
The proceeds from the bond sale might be used for expanding capital, share buybacks, acquisitions, and investments. Due to Meta’s current financial situation, it would be reasonable for the company to repurchase stocks to help increase its value. After all, Meta’s stock value has dropped more than half from its $168.80 high in September 2021.
Top credit score institution Moody’s assigned the tech giant an A1 rating for investment grade ranks, while the S&P 500 gave it an AA-, one rank higher.
“The A1 issuer rating is based on Meta’s strong credit profile, which reflects the leading global position of its platform brands in social networking, supported by its extensive user base,” Moody’s said in a report.
On Thursday, Meta presented updates to its services by expanding Instagram NFTs to 100 more countries. The company started integrating blockchain technology into Instagram in June. Facebook followed suit in July. The social media platforms now support NFTs minted on the Flow blockchain and connections with third-party wallets, such as MetaMask, Coinbase Wallet, Trust Wallet, and Dapper.
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