Reports indicate that Mark Zuckerberg's Meta Platforms is on the verge of finalizing nearly $30 billion in funding to construct a data center in rural Louisiana, marking the largest private equity deal ever recorded.

Insiders have revealed that Meta will jointly own the Hyperion data center in Richland Parish, Louisiana, with Blue Owl Capital Inc., retaining only 20% ownership. To finance the construction project, Morgan Stanley has raised over $27 billion in debt and approximately $2.5 billion in equity for a special purpose vehicle (SPV). This structure is increasingly common in large transactions.

Morgan Stanley began preparing for this deal earlier this year, attracting numerous asset management firms and infrastructure lenders to participate. Ultimately, Pacific Investment Management Company (Pimco) and Blue Owl emerged as the winners, with Pimco serving as the primary lender.

Analysts suggest that this financing will provide a template for other hyperscalers, allowing them to develop new facilities without adversely affecting their credit ratings. Faced with soaring construction costs, many companies are opting to take on debt to expand. Data compiled by media indicates that, as of the end of September, U.S. tech companies raised approximately $157 billion in the bond market, a 70% increase compared to the same period last year.

Under the SPV structure, the financing entity is the special vehicle itself rather than Meta accumulating debt directly. Meta will act as the developer, operator, and tenant for the project, expected to be completed by 2029. Insiders have stated that Meta will contribute nearly $6 billion in construction funds through its 20% equity stake.

This structure helps tech companies avoid recording massive debts on their balance sheets and provides Wall Street investors with opportunities for investing in tangible assets, thereby obtaining investment-grade ratings. Currently, insurance companies and other investment institutions are increasingly favoring asset-backed structured investments. Elon Musk's AI company xAI is also using a similar model to finance $20 billion by leasing chips through a financing vehicle instead of purchasing them outright.

Bond Sales Surge On Thursday, the parties involved in the Meta project completed the final step by pricing bonds in 144A format. According to two insiders, a small number of other investors also participated in the debt subscription. The bonds will mature in 2049 and are fully amortizing. One insider reported that the bond is priced about 225 basis points above comparable U.S. Treasury rates. This deal is exclusively underwritten by Morgan Stanley, with Standard & Poor’s giving the securities an A+ investment-grade rating.

Another source indicated that by Friday morning, the bonds had risen to 105% of par value. This is quite rare in the investment-grade bond market, with at least $1 billion worth of bonds traded at premium levels within just hours.

For Pimco, this transaction is significant as the firm has been seeking to move away from traditional public bond backgrounds. Earlier this year, the credit giant also partnered with KKR to venture into asset-backed finance, acquiring nearly 10% of Harley-Davidson's financial subsidiary and purchasing its retail loans.

The Hyperion data center covers approximately 4 million square feet and is the largest among Meta's 29 data centers worldwide. Analysis of government data reveals that when fully operational, the center is expected to draw up to 5 gigawatts of electrical power, equivalent to the energy consumption of 4 million American households. A report from S&P indicates that Entergy plans to provide Meta's campus with up to 3 gigawatts of power by December 2028, contingent on timely completion of substations, multiple transmission lines, and power plants.

Morgan Stanley acts as the advisor for Meta's transaction and is actively expanding its influence in the AI sector. In June, the bank also provided advisory services for xAI's corporate bond financing and is currently marketing junk bonds for cryptocurrency mining firm TeraWulf Inc. Reports suggest that Morgan Stanley previously participated in a $40 billion acquisition of Aligned Data Centers, led by BlackRock’s infrastructure investment team.

This Louisiana project is only one of many large data center initiatives by Meta. Earlier this week, the company also announced plans to build another gigawatt-scale data center in El Paso, Texas, and is simultaneously constructing a large data center in Ohio.