Jul 24, 2026
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Add us on GoogleThe continued AI arms race, which has tech companies spending a projected $2.5 trillion this year alone, may have bond investors finally saying enough is enough.
Meta is learning this first hand. The company, part of the “Magnificent 7,” is looking to raise capital for its latest $12 billion data center deal in El Paso, Texas. The nearly one-gigawatt data center project is preparing to sell corporate bonds as early as July 27 through a special purpose vehicle owned by BlackRock, according to the Financial Times.
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In October 2025, Meta secured a record $27 billion corporate bond sale for its “Hyperion” data center project in Louisiana. The difference now is investors are demanding greater returns, as they look to offset the growing AI exposure in their portfolios amid some worries of an AI bubble.
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According to the Financial Times’ reporting, BlackRock and Meta are offering yields north of 7% in initial discussions. But some investors are demanding 0.4 percentage points more for the El Paso bond deal than Meta’s “Hyperion” data center bond sale.
“When you’re selling tens of billions of bonds, even a 0.1-percentage-point increase in costs would lead to tens of millions of additional interest expenses every year,” an unnamed credit investor focused on investment-grade debt told the Financial Times.
Special purpose vehicles Beignet and Sopaipilla
It’s become common for big tech companies to borrow from a project entity in order to keep AI expenditures off their balance sheets while raising needed capital. Meta is doing this with BlackRock for its El Paso data center project.
What stands out are the names given to these special purpose vehicles by Meta and its partners. Bonds linked to Meta’s “Hyperion” project in Louisiana sold through a special purpose vehicle called Beignet Investor. It was named after the deep-fried pastry that tourists rush to try at Cafe Du Monde in New Orleans.
For its El Paso data center, bonds will be sold by a special purpose vehicle named Sopaipilla Investor — another fried pastry popular in parts of South America and eaten widely in Texas. For what it’s worth, sopaipillas are believed to have originated in New Mexico more than 200 years ago.
It’s not clear why Meta is naming its multibillion-dollar AI debt deals after popular desserts. The company, as well as Beignet Investors and Sopaipilla Investor, did not immediately respond to Moneywise’s request for comment on this, or clarification on yields offered to prospective bond buyers.
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Sopaipilla Investor bond rating
Sopaipilla Investor, the SPV for Meta’s El Paso data center project, will hold 80% stake in the Texas project, with Meta owning the remaining share after the bond deal is completed.
The bond will mature in 2048 and is secured by Meta’s 20-year rent payment agreement beginning in 2028, according to the Financial Times. If Meta abandons the agreement, it will have to pay a hefty fee providing stronger bond holder protections.
However, Meta can terminate its agreement in the event of a severe casualty event that delays the project more than 18 months, according to S&P Global. The rating agency assigned the bonds an A plus rating.
“From our standpoint, this is a very robust structure,” Viviane Gosselin, an analyst at S&P, said.
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Danni Santana is a journalist based out of New York City with a decade of experience reporting and editing business stories about retail, restaurants, sports, and personal finance.
