BlackRock Raises $12 Billion for Meta’s El Paso Data Center
BlackRock is raising $12 billion to build Meta a data center it will own, lend money to, and rent out.
The Details:
The same BlackRock that recently acquired the world’s largest data-center developer is now funding this project through at least $12 billion in debt. 80% of the approximately one-gigawatt facility in El Paso, Texas, is owned by BlackRock and its infrastructure and private-credit arms, while Meta owns just 20%.
Key Points:
- Off-Balance Sheet Financing: Most of the borrowing never touches Meta’s balance sheet. Instead, debt sits with a BlackRock-controlled entity, and Meta pays rent. This keeps much of the cost off Meta’s books, treating it as operational expenses rather than capital expenditure.
- Meta’s Precedent: This structure is similar to Meta’s previous data center in Louisiana, where a joint venture used a similar setup with BlackRock holding 80% and Meta 20%.
- BlackRock’s Investment: This deal aligns with Larry Fink’s strategy of acquiring private-market firms Global Infrastructure Partners and HPS.
- Risk Factors: As with all off-balance sheet AI deals, there are risks involved. The long-dated bonds rely on sustained demand for AI and Meta’s ability to pay rent over the long term. The data center equipment itself depreciates over time, and leases often run shorter than the buildings they finance.
Source: [Insert Link if Available]