US stocks: SpaceX draws $89 billion demand for debut high-grade bond sale

SpaceX has drawn about $89 billion of demand for its debut US bond sale, according to people with knowledge of the matter, setting the stage for one of the biggest deals in the US investment-grade market this year.

Elon Musk’s rocket, satellite and AI conglomerate is seeking to raise between $20 billion and $25 billion from the five-tranche offering in a deal that’s expected to price on Tuesday. At the lower of that range, demand would exceed the bond size by more than four times.

Proceeds from the sale will refinance a temporary bridge loan and fund other corporate expenses.

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Debt investors, who tend to be more conservative than those in the equity market, are betting on Musk’s ability to deliver on his promises even as the company is projected to burn significant amounts of cash over the next few years.

The transaction offered investors an opportunity to buy debt from a first-time issuer while diversifying their exposure to companies linked to the artificial intelligence boom, Bloomberg Intelligence analyst Robert Schiffman said in a note.

Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley, the banks managing the bond sale, either declined to comment or didn’t immediately respond to requests for comment.