SpaceX Bond Slammed for Sloppy Secondary Market Performance

Invesco Advisers Inc.'s head of investment-grade credit for North America, Michael Brill, criticized SpaceX's inaugural bond sale on Thursday, describing its secondary market performance as "very sloppy." Brill, speaking to Bloomberg, highlighted that the bonds, which were issued at a discount, saw their prices fall significantly after trading began. This decline indicates that the initial pricing may have been too aggressive or that market demand was overestimated. SpaceX, the rocket company founded by Elon Musk, sold $1.5 billion in bonds in May 2023. The offering was structured as a zero-coupon bond with a maturity date in 2030. The company aimed to raise capital for general corporate purposes, including funding its Starlink satellite internet service and its Starship spacecraft development. The bond sale marked SpaceX's first foray into the corporate debt market. Despite the criticism of its secondary market performance, the initial sale itself was reportedly well-received, attracting substantial investor interest. However, the subsequent price drop has raised questions about the valuation and market reception of SpaceX's debt. Brill's comments suggest a lack of robust demand or an oversupply of the bonds once they became available for trading. This situation could potentially impact SpaceX's ability to raise future debt financing at favorable terms if investor confidence is shaken by this initial performance. The company has not yet publicly responded to the criticism regarding the bond's secondary market trading.