SpaceX Raises $25 Billion in Debt Sale After Record IPO
Quick Look
- SpaceX has successfully raised $25 billion through a senior unsecured notes offering, less than two weeks after its record-breaking IPO.
- The company received nearly $90 billion in orders for the bonds, which will be used to repay a bridge loan and for general corporate purposes, including funding Starship development and AI initiatives.
AI-generated summary
Why It Matters
SpaceX, following a record IPO, has raised $25 billion in a debt sale to fund its ambitious projects including Starship, Starlink, and AI initiatives, despite its history of accumulated losses.
Less than two weeks after its record IPO, SpaceX has raised $25 billion in a debt sale.
SpaceX on Monday announced a senior unsecured notes offering, with sources telling CNBC that the company was looking to raise $20 billion. The company said Tuesday that number increased to $25 billion. SpaceX received nearly $90 billion worth of orders, according to people familiar with the fundraising who asked not to be named because the details are private.
Bloomberg was first to report on the orders figure.
Banks managing the bond sale include Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley.
SpaceX is tapping the debt markets shortly after the company's blockbuster IPO, which turned CEO Elon Musk into the world's first trillionaire. The IPO raised nearly $86 billion, including the underwriters' option, and SpaceX disclosed on Monday that it now has just over $100 billion in cash.
In the debt sale, SpaceX priced bonds in five different tranches, with notes due between 2031 and 2056. Rates vary from 5.35% for the 2031 bonds to 6.65% for the 2056 notes. The company said in a press release that it "intends to use the net proceeds from the Notes Offering to repay the outstanding borrowings under its bridge loan facility in full, to pay related fees and expenses, and any remaining amount for general corporate purposes."
SpaceX raised a $20 billion bridge loan in March with an effective interest rate of 4.58%, according to the IPO prospectus.
SpaceX needs hefty amounts of capital as it looks to fund development of its massive Starship rockets and the expansion of its Starlink satellite internet business while paying for a wide array of artificial intelligence initiatives, including revamping its Grok models and coding agents.
SpaceX is also moving ahead with the $60 billion all-stock acquisition of AI-coding startup Cursor.
The only profitable part of SpaceX's business is Starlink. According to its prospectus, SpaceX has accumulated a total loss of $41.3 billion since the company's founding in 2002.
The bond sale represents one of the largest in the AI era. Earlier this year, Oracle raised $25 billion in a bond offering, Amazo n raised about $54 billion and Alphabet pulled in about $31.5 billion in bond sales in the U.S. and Europe.
WATCH: Can't invest in SpaceX yet as a bottom-up fundamental manager
What to Watch
AI outlook — possibilities, not facts
SpaceX to continue aggressive capital raises for expansion.
Very likely · Within months
Open Questions
- Specific details of Cursor acquisition funding
- Long-term profitability strategy beyond Starlink
