BREAKINGVIEWS-SpaceX debt builds on $4 trln Jenga tower

SpaceX

SpaceX

SPCX

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The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Robert Cyran

NEW YORK, June 23 (Reuters Breakingviews) - Elon Musk’s rockets-to-AI venture burns cash, and will for years. Yet its first $20 bln of bonds are deemed safe after an IPO fortified the balance sheet. The ability to sell more stock is the real comfort for investors. Expect OpenAI and Anthropic to play the same risky game.

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CONTEXT NEWS

SpaceX on June 22 unveiled plans to issue bonds for the first time, selling senior unsecured notes to repay a $20 billion bridge loan due in 2027.

The rocket and AI company's borrowing follows a June 18 decision from credit agencies Fitch, Moody's and S&P ​Global Ratings to rate the debt as investment-grade. It also raised $85 billion in an initial public offering on June 11.

BofA, Citigroup, JPMorgan, Goldman Sachs and Morgan Stanley provided the bridge financing and are expected to run the bond deal, Reuters reported on June 18, citing an unnamed source.


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