It’s happening, Meta is selling $10B in corporate bonds. Reportedly, S&P Global Ratings has assigned Meta a AA- investment-grade rating and the bonds have been issued with very favorable terms. Fun fact: Meta has been one of just 18 companies in the S&P 500 without debt to this point.

Proceeds from the sale can be used for capital expenditures, stock buybacks, acquisitions and other investments. Since Q3 2021 there has been a significant uptick in buybacks. Unfortunately, until January 2022, these have been made with quite high prices, not the very best capital allocation.

But the situation has changed. The stock is down significantly and IMO it’s a great opportunity for Meta to buy back stock now with low yield debt. Meta has been using cash to repurchase stock, including $5.1B in the Q2, and had $24.3B available for buybacks as of June 30.

If you are a shareholder, it would be advantageous for the stock to stay down for a while longer, so the company can buy back more cheap shares. With patience, this should yield great results in the long term.

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