Meta's AI-linked bond sinks to fresh low even as its stock rallies sharply higher

The world's biggest private debt sale — a bond series tied to one of Meta's AI data centers — has dropped to its lowest level since the deal was initially priced at par in October of last year.

While the Nasdaq composite index reached a fresh all-time high on Tuesday, driven by an AI-fueled rally, anxiety grew within the credit market for the technology sector.

The $27.3 billion bond issuance, which funds Meta's Hyperion AI data center, declined to a troubling 94.4 cents on the dollar, marking a record low. Notably, the decline occurred on the same day as Meta’s largest intraday stock rally in a year, which saw shares jump 9%.

This bond series represented the largest private debt offering ever sold. The corporate notes, which are backed by Mark Zuckerberg's extensive AI operations at Meta, carried a 6.581% coupon and a long-term maturity date of 2049.

PIMCO, the biggest bond manager globally, anchored the deal with approximately $18 billion. Blackrock, the world's largest asset manager, purchased more than $3 billion through its funds.

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Technically, the debt is held on the books of Beignet Investor LLC, a special-purpose vehicle. A search for Beignet Investor LLC's pricing shows the latest quotes at 94.61 to 94.4, well below the 100 par value.

In October 2025, S&P assigned an A+ rating to Beignet Investor LLC’s AI bond. That placed it just one notch below regular Meta corporate bonds that are backed by Facebook, Instagram, WhatsApp and other divisions of Zuckerberg's company.

Shortly after its initial pricing, Beignet Investor LLC’s AI bond traded above par, reaching as high as 110. By late July, it had declined to approximately 96 cents. Today, it has retraced 14% of its peak gain.

PIMCO’s own GIS funds now value it at 94.5, despite the firm having anchored the initial offering.

An $18 billion position purchased at par would currently represent a paper loss of roughly $1 billion.

These losses for bond investors stand in contrast to Meta's otherwise positive developments and stock performance. On September 8, the company launched Muse, a personal AI agent available in free, $20 and $100 tiers.

Initial adoption was strong, with Muse quickly rising to the top of Apple's US App Store chart.

Goldman Sachs spent the trading session identifying every business the agent might disrupt. Companies built on recurring billing — what Goldman calls its "consumer inertia" basket, including AT&T, Allstate, Netflix and Booking.com — fell 2.6% on the day, marking the basket's worst performance since February.

In July, Protos reported that credit default swaps on mega-cap AI names were widening.

Moody’s warned that the AI sector's heavy capital expenditure binge could hurt the credit quality of even the biggest AI companies.