Latest news with #PacificInvestmentManagement
Yahoo
08-08-2025
- Business
- Yahoo
Meta's $29 Billion Deal Marks Pivotal Moment for Private Credit
(Bloomberg) -- The heavy hitters of private credit have been waiting for this moment for years. All Hail the Humble Speed Hump Three Deaths Reported as NYC Legionnaires' Outbreak Spreads Mayor Asked to Explain $1.4 Billion of Wasted Johannesburg Funds Major Istanbul Projects Are Stalling as City Leaders Sit in Jail Chicago Schools' Bond Penalty Widens as $734 Million Gap Looms Major lenders, which often cater to companies with dented credit, talk endlessly about the opportunities in investment-grade debt and in financing the breakneck growth of artificial intelligence. They've done smaller deals, but this week they caught the biggest fish yet: a $29 billion financing package for Meta Platforms Inc.'s massive data center in Louisiana. That transaction, led by Pacific Investment Management Co. and Blue Owl Capital Inc., hits all the high notes: It's a top-notch business in a hot sector. It disrupts the usual route that companies like Meta travel to get money from investors through banks. And, it's huge. 'Private credit has been itching to get into this space,' said John Medina, senior vice president on the global project and infrastructure finance team at Moody's Ratings. 'This deal is one of the first of its kind for private credit and if it is successful, we would expect to see more.' The biggest technology companies are in an AI arms race now, and they need cash to win. Elon Musk's xAI Corp. recently told investors it plans to spend $18 billion on data centers, and is looking at raising debt backed by projects rather than at the corporate level. Others including Inc. and OpenAI Inc. are pursuing their own sites across the US. Morgan Stanley estimates that capital expenditures on AI could exceed $3 trillion in the next three years. For Meta, Pimco is planning to arrange $26 billion in debt and Blue Owl is providing $3 billion in equity. The debt portion is likely to be issued in the form of investment-grade bonds backed by the data center's assets, people familiar with the matter said, adding that the final structure is still in flux. The bidding war for the financing lasted months. It was competitive because private credit firms have been all-but-begging for access to the investment-grade debt world that banks dominate. Other private credit firms that grappled for the top spot include Apollo Global Management Inc. and KKR & Co., which made it to the final round, as well as Brookfield Asset Management Ltd., Blackstone Inc. and Ares Management Corp., said the people, who were not authorized to speak publicly. Morgan Stanley advised Meta on the deal but isn't leading the financing. It is the largest funding package related to a specific AI data center by a mile, with others involving xAI Corp. or Coreweave Inc. well below $10 billion. Microsoft Inc., BlackRock Inc. and the United Arab Emirates' MGX investment vehicle are teaming up to raise $30 billion of private equity that can be leveraged to $100 billion, with Nvidia Corp. and xAI also joining in, but that money is for a series of data warehouses and energy infrastructure rather than an individual project. The most recent debt deal of any kind that's even near the size of Meta's was a $26 billion bond sale to support Mars Inc.'s purchase of rival food-maker Kellanova in March. A group of banks put together the financing, which was funneled through to their typical investors in the syndicated market. Dry Powder Private credit firms have about $450 billion of dry powder to invest, according to Preqin data, and are clamoring for this kind of business. The corporate acquisitions that often fuel private credit deals are practically at a standstill. And these firms aspire to more fully become rivals to traditional Wall Street banks — handling everything from advising companies to structuring their debt to providing some of it themselves. Expanding further into investment-grade deals could help make private credit a $40 trillion market, according to an estimate from Apollo. 'This ecosystem of private investment-grade is a massive market with a huge tailwind,' Michael Zawadzki, the global chief investment officer at Blackstone's credit and insurance unit, said last year. Representatives for Apollo, Meta, Pimco, Blue Owl, Brookfield, Blackstone, Ares and Morgan Stanley declined to comment. Those for KKR and xAI didn't immediately respond to requests for comment. KKR and Energy Capital Partners last year agreed to a $50 billion partnership to accelerate the development of infrastructure for artificial intelligence. Blue Owl CEO Marc Lipschultz has compared the AI craze to the Gold Rush: though lenders aren't out there digging for treasure, they can provide the 'picks and shovels' that technology firms need. 'In this case, it takes the modern version, the data centers,' he said during a conference call on July 31. 'And we are the best placed firm to help develop and to help fund those data centers.' --With assistance from Laura Benitez and Kurt Wagner. The Pizza Oven Startup With a Plan to Own Every Piece of the Pie Digital Nomads Are Transforming Medellín's Housing Russia's Secret War and the Plot to Kill a German CEO It's Only a Matter of Time Until Americans Pay for Trump's Tariffs The Game Starts at 8. The Robbery Starts at 8:01 ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
18-06-2025
- Business
- Bloomberg
Pimco and King Street's AmSurg Windfall Caps Ugly Distressed-Debt Saga
The sale of AmSurg, an ambulatory surgery company once part of KKR & Co.-backed Envision Healthcare Corp., caps an epic distressed-debt saga that will hand a windfall to investors that took ownership of the business after an ugly debt brawl. Pacific Investment Management Co., King Street Capital Management, and Partners Group are among the AmSurg owners netting nearly $4 billion from the deal to sell the company to Ascension Health, one of the biggest nonprofit health systems in the US.
Bloomberg
13-06-2025
- Business
- Bloomberg
Japan Bonds Are a Tactical Buy for Pimco After Yields Hit Record
Pacific Investment Management Co. is interested in buying long-dated Japanese government bonds as a tactical trade following a surge in the 30-year yield to all-time highs. The bonds are now looking 'really interesting,' said Andrew Balls, chief investment officer for global fixed income at the $2 trillion asset manager, in an interview with Bloomberg TV.
Bloomberg
12-06-2025
- Business
- Bloomberg
Pimco Hires Advisers for Loan Tied to Saks-Neiman Marcus Deal
A Pacific Investment Management Co. -led group holding loans tied to the sale of Neiman Marcus Group has tapped advisers to help ensure they get repaid when the debt comes due next year. The creditors, who acquired the debt as part of the 2024 sale of Neiman Marcus to Saks parent Hudson's Bay Co., are working with advisers from Ducera Partners and White & Case, according to people with knowledge of the developments, who asked not to be named discussing private decisions.
Bloomberg
09-06-2025
- Business
- Bloomberg
Fortress to Double London Footprint to Accommodate European Push
Fortress Investment Group is planning to more than double its London office footprint as it expands its European business. The alternative asset manager is in talks to rent about 20,000 square foot (1,850 square meters) of space at 25 Baker Street, people with knowledge of the negotiations said. Fortress will sublet the space from Pacific Investment Management Co. which has previously agreed to lease about half the building from developer Derwent London Plc, the people said, asking not to be identified as the negotiations are private. The agreement has not yet been signed, they added.
