Pimco buys $4 billion of SpaceX AI debt package led by Apollo - Bloomberg

Pacific Investment Management Co. purchased a $4 billion portion of a large SpaceX financing deal designed to expand the company’s artificial intelligence operations, according to reporting from Bloomberg, citing people familiar with the matter.

Elon Musk’s SpaceX said Monday it signed a roughly $40 billion equipment-financing deal with lenders led by Apollo Global Management Inc. (NYSE:APO) to help facilitate purchases of Nvidia Corp. graphics processing units and related equipment.

Pimco is buying part of the A2 tranche of the overall debt package, said one of the people. That portion of the debt sits between more junior and senior slices of the package. The debt will be issued as 144a bonds, or privately placed debt securities that can be traded among certain institutional buyers.

Pimco has become a key buyer of debt fueling the AI boom, though the Newport Beach-based asset manager has cautioned on the industry’s excesses. The firm was an anchor investor in financing Oracle Corp.’s data center campus in Michigan and backed Meta’s project in Louisiana.

Debt markets have soured on AI companies in recent weeks, as the industry’s rapid spending has outstripped its profitability to date. The interest rate on the debt was not disclosed Monday.