Banks to Unload $3 Billion in Debt Financing for Meta's Prometheus Data Center

Meta Expands Artificial Intelligence Infrastructure with $3 Billion Data Center Loan

A group of banks, including Natixis SA, Mitsubishi UFJ Financial Group Inc., and Societe Generale SA, have initiated the sale of $3 billion in loans for a data center in Ohio backed by Meta Platforms Inc. This move is part of the company's efforts to build out its artificial intelligence infrastructure.

The general syndication of the loans for the data center building, as well as related power assets, is structured in a single transaction. Royal Bank of Canada and Sumitomo Mitsui Banking Corp are also arrangers in the transaction. The 1-gigawatt New Albany, Ohio cluster, known as Prometheus, is one of several massive data centers Meta is investing in to power its AI efforts. It's expected to come online this year, according to Meta's Chief Executive Officer Mark Zuckerberg, who has pledged to spend hundreds of billions of dollars through the end of the decade on AI and infrastructure needed to support it.

The banks are aiming to conclude the marketing process on April 16, after kicking off discussions last month. The transaction consists of two construction loans: a $2.1 billion tranche, and a $900 million tranche, which will be offered as four-year loans with a one-year extension each. Pricing is indicated at 2.5 percentage points over the benchmark for both loans, which for the most part will be sold on a pro-rata basis.

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Upfront fees are based on a grid tied to commitment sizes. Investors can buy various tiers of debt ranging from less than $75 million to as much as $125 million, which pay fees from 0.375% to 1.25%. The debt is being marketed to investors including banks, institutional investors, and private credit lenders.

EdgeConneX Inc., a data center operator acquired by private equity firm EQT Infrastructure, will run the Ohio project. Representatives for Meta, MUFG, SMBC, RBC, and EQT Partners, parent of EQT Infrastructure, declined to comment. Natixis, SocGen, and EdgeConneX did not immediately respond to requests for comment.

In related news, Meta sold $30 billion of investment-grade bonds in a record-shattering transaction last year. The company also sealed a $29 billion private capital deal with Pacific Investment Management Co. and Blue Owl Capital Inc. to help finance its Hyperion data center site in Richland Parish, Louisiana.

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