SpaceX pitches investors juicy yields in $25bn bond deal

SpaceX is seeking to raise $25 billion through a bond offering, a move that has attracted significant investor interest due to high borrowing costs. The company's debt is being marketed with yields that could reach 8.75%, a figure that is considerably higher than typical corporate bonds, according to a term sheet seen by Bloomberg. This substantial yield is intended to compensate investors for the risks associated with lending to a company that is still heavily investing in its ambitious Starship program. The offering has been upsized from an initial $15 billion, indicating strong demand from a range of investors, including hedge funds and asset managers. Morgan Stanley and Barclays are leading the sale of the debt, which is expected to be rated B- by S&P Global Ratings. The bonds will mature in 2030, and the proceeds will be used for general corporate purposes, which are understood to include funding the continued development and production of Starship, SpaceX's next-generation rocket system. This bond issuance represents a significant financial undertaking for SpaceX as it pushes forward with its long-term goals of interplanetary travel and satellite internet expansion through its Starlink service.