BlackRock secures long-term financing for Meta’s Texas data center

BlackRock and Meta just pulled off one of the most ambitious infrastructure financing deals in recent memory. The world’s largest asset manager raised between $12.3 billion and $12.5 billion through a single bond issuance to fund an 80% stake in Meta’s sprawling data center campus in El Paso, Texas. The total development price tag: roughly $14 billion.

How the deal works

The joint venture gives BlackRock 80% ownership of the data center campus, with Meta retaining the remaining 20%. Meta plans to lease the entire facility starting in 2028, effectively becoming a tenant in a building it helped create.

Meta’s contribution to the partnership includes land and construction already in progress, valued at approximately $2.3 billion. The company also received a $1 billion distribution as part of the arrangement.

The campus is designed to generate approximately 1 gigawatt of capacity.

Fitch Ratings projects that Meta’s lease payments will cover the debt at a ratio of about 1.12x over a 20-year period. The bonds were priced at a 7.5% yield.

Keeping the flippers out

The bond sale, led by JPMorgan and Morgan Stanley, was structured to attract what the industry calls “real-money” investors: pension funds, insurance companies, and endowments that buy bonds and hold them to maturity.

BlackRock moved specifically to prevent fast-trading investors from getting their hands on the offering, a strategy designed to stabilize the bonds in secondary markets and avoid the kind of volatile price swings that can spook follow-on investors.

Why Meta chose this path

By structuring the El Paso campus as a joint venture rather than a wholly owned facility, Meta offloads the majority of the upfront capital costs to BlackRock, preserves existing tax incentive agreements with the city of El Paso, which remain intact under the new ownership model, and secures guaranteed access to a gigawatt-scale facility through a long-term lease without the balance sheet weight of full ownership.

The $1 billion distribution Meta received on top of its contributed assets sweetens the arrangement further.