SpaceX's $40 Billion Off-Balance-Sheet Financing Plan Hits Negotiation Roadblock, New Debt Could Impact Credit Rating

Odaily Report: SpaceX's planned $40 billion financing through a special purpose vehicle (SPV) to purchase Nvidia chips has reportedly encountered obstacles. Sources familiar with the matter revealed that SpaceX aims to move the related liabilities off its balance sheet to protect its own investment-grade credit rating. However, recent turmoil in the credit markets has driven up borrowing costs across the industry, complicating negotiations over the pricing of this financing. The financing plan is expected to be structured into three tranches of 144A bonds, with the subordinated portion sized at $25 billion to $30 billion, and the other two tranches at $10 billion and up to $5 billion, respectively.

SpaceX delivered strong results in the third quarter of this year, with its AI business achieving profitability for the first time and generating additional revenue by selling computing power from its Memphis data center to external AI labs and major cloud service providers. Last year, SpaceX attempted to raise up to $20 billion in off-balance-sheet debt for Musk's AI company xAI, but auditors determined the transaction did not meet accounting treatment requirements, ultimately resulting in approximately $13 billion in debt being recorded on SpaceX's own balance sheet. SpaceX Chief Financial Officer Bret Johnsen has expressed confidence in continuing to raise capital prudently while maintaining the company's investment-grade credit rating. (Bloomberg)