SpaceX plans $20 billion bond sale after record-breaking IPO

SpaceX is preparing a bond issuance of at least $20 billion, underwriters told investors Thursday, just days after the rocket company's record $85.7 billion initial public offering made Elon Musk the world's first trillionaire.

"The sheer size of this debt offering underscores the capital intensity of SpaceX's Starship program and the ongoing expansion of its Starlink satellite network," said Anders Schelde, chief investment officer at Danish pension fund AkademikerPension, which declined to participate in the IPO. "We cannot make the numbers work at the current valuation, and we believe its governance standards are very weak from a minority shareholder perspective."

The bond sale would be one of the largest corporate debt offerings by a recently public company in history. SpaceX raised $75 billion in its IPO, with an additional $10.7 billion from the underwriters' greenshoe option, making it more than twice the size of the previous record held by Saudi Aramco's $29.4 billion offering in 2019. The company's shares have surged since listing, pushing its market capitalization above $2.6 trillion and briefly surpassing Amazon.com Inc. before settling back.

The debt financing comes as SpaceX pursues an aggressive capital expenditure program. The company is developing Starship, its next-generation rocket designed for deep-space missions, while simultaneously scaling Starlink, its satellite internet constellation that requires continuous launches to expand coverage. SpaceX also recently entered a formal agreement to acquire AI-coding startup Cursor for $60 billion in stock, following its merger with Musk's artificial intelligence company xAI in a deal that valued the combined entity at $1.25 trillion.

The bond issuance signals that SpaceX's underwriters see strong institutional demand for the company's debt despite its lack of profitability. Amazon.com Inc., by comparison, generated 38 times more revenue than SpaceX last year, while the rocket company continues to lose billions of dollars annually, according to CNBC. The offering is expected to close in the third quarter, subject to market conditions, with a syndicate of banks led by the IPO's lead underwriters managing the sale.

This article is for informational purposes only and does not constitute investment advice.