The $27.294 billion of senior secured notes behind Meta's Hyperion campus in Louisiana were marked at 94.4 cents on Wednesday, a record low the tape read as a verdict on AI credit. Meta does not consolidate that venture, and its 10-Q to 30 June puts the maximum exposure to loss on it at $46.03 billion, nearly twice the bond being quoted. The six senior unsecured notes Meta sold a fortnight later have fallen further than it has.
Meta sizes three of the four things inside the $46.03 billion
- Equity carrying value $2.92 billion, from $1.83 billion at the end of 2025, on a 20% membership interest.
- Lease commitments of approximately $12.31 billion, commencing in 2029 on four-year initial terms with renewals to twenty years.
- Residual value guarantees with an aggregate threshold of approximately $28 billion, declining over time. The filing's words: "RVG payments are not probable, and therefore no liability has been recorded to date."
- Estimated future funding, unsized. The three disclosed pieces come to $43.23bn, so $46.03bn − $43.23bn = about $2.8 billion of funding. That subtraction is ours and it moves with the rounding on the guarantee threshold.
Off-balance-sheet is the wrong word for a number printed in a filing with its parts named. Meta is not the primary beneficiary because remarketing decisions drive the venture's economics and it does not direct them. El Paso, a second venture Meta has not yet closed, would add about $13 billion more.
The leases inside it are 4.4% of what Meta has signed and not started
Leases that had not commenced at 30 June come to approximately $278.99 billion of data centres, colocations and network infrastructure, starting between now and 2036. $12.31bn ÷ $278.99bn = 4.4%. Against $349.31 billion of non-cancelable commitments the whole maximum is 13.2% and the bond alone 7.8%. Meta's capital expenditure guide of $130–145 billion is one year of spend, larger than the note.
Meta sold six notes a fortnight later and five of them fell further
Two weeks after Beignet Investor LLC priced, Meta sold $30 billion of its own senior unsecured notes in six series, rated Aa3/AA−, at 50 to 110 basis points over Treasuries. All six trade in Frankfurt, and the table above has Wednesday afternoon's quotes.
Beignet's 5.6-point fall sits between Meta's 2030 note and its 2032, and the 2055 has lost 3.2 times as much. The filing marks that stack itself: $79.75bn ÷ $84.00bn = 94.9 cents on the dollar at 30 June. Two months before anyone called 94 cents a record low, Meta's own unsecured curve was there.
An 85 basis point move on the sixteen-year point covers all 5.6 points
Beignet priced at par on 16 October 2025, a 6.581% coupon at 225 basis points over Treasuries, which puts its benchmark at 4.331%. The ten-year closed that day at 3.99% and the twenty-year at 4.56%, so the benchmark interpolates to the sixteen-year point; the thirty-year closed at 4.58%. Buyers priced this at issue as a sixteen-year-average-life bond because it amortises, and the 23.6 years in the coverage is issue to final maturity.
That same point stood at 5.18% on 21 September, a move of 85 basis points, and a 5.6-point fall on 85 basis points implies a modified duration of 6.6.
R40 arithmetic. Par repriced for an 85 basis point rise in the sixteen-year Treasury point, spread held at issue.
| Modified duration | Price, rates only | Spread vs issue |
|---|---|---|
| 6.0 | 94.90 | wider |
| 6.6 | 94.40 | unchanged |
| 7.0 | 94.05 | tighter |
| 8.0 | 93.20 | tighter |
| 8.3 | 92.93 | tighter |
| 11.4, bullet | 90.31 | tighter |
The sixteen-year point is where Beignet's 6.581% coupon at 225 basis points over Treasuries put its benchmark on 16 October 2025, interpolated from that day's ten- and twenty-year constant-maturity yields; the same point stood at 5.18% on 21 September 2026. Durations of 7.0 to 8.3 are our modelling of three amortisation profiles to a 2049 final maturity; the actual schedule is in a 144A offering memorandum and is not public. The bullet row is the structure the 23.6-year framing implies.
The schedule is the soft rung, and it sits in a 144A data room. Three plausible profiles to a 2049 maturity give durations of 7.0 to 8.3 today, and every one takes par below the mark on rates alone, leaving the credit spread tighter than issue rather than wider. Only a duration below 6.6 leaves any of the fall to credit, and that needs principal back faster than a 2049 maturity allows. A schedule that front-loaded would make this wrong.
The guarantee bites in the one state that would make it expensive
The strongest case against reading the footnote as reassurance is correlation. Meta owes the shortfall between a property's fair value and the guarantee threshold if it terminates or declines to renew, which is what it would do if the capacity were not needed, the same event that would sink the property's value. A maximum that is "not probable" in the base case does not stay unlikely in the bad one.
Size answers it. The $28 billion threshold is two thirds of Meta's $42.62 billion of first-half net income, spread over the years it runs, and the whole $46.03 billion is 2.4% of a $1.896 trillion market cap at Tuesday's $736.60 close on 2,574 million diluted shares. One sentence in the next 10-Q overturns that reading: record a liability against the guarantee and the exposure stops being a maximum.
Two claims in the coverage also fail. Protos paired the record low with a soaring stock, citing Meta's largest intraday rally in a year; Meta closed Tuesday down 0.63%. And 94.4 is a fund valuation, not a trade: the notes are 144A, with no public print and no listing. Oracle's New Mexico loans ran the shape inverted on Monday: there the marked borrowing was the landlord's, and Oracle's filing named neither.
The venture, leases, commitments, balance sheet, El Paso agreement and the quoted sentence on residual value guarantees come from Meta's 10-Q to 30 June 2026; the capital expenditure range is its guidance with the second-quarter results. Prices, coupons, spreads and ratings for the six November 2025 notes are from the pricing term sheet Meta filed with the SEC, and Wednesday's quotes on them are Frankfurt exchange prices from early that afternoon. Beignet Investor LLC's size, coupon, maturity and spread are press-reported from IFR and bond data services; the mark and the record-low framing are Protos. Treasury yields are the Federal Reserve's constant-maturity series, the closing prices our own snapshots. The residual funding figure, every ratio, the interpolation and all duration arithmetic are ours.
