On Monday, JPMorgan and Morgan Stanley began pitching investors on a bond sale of at least $12 billion, as The Wall Street Journal reported. The money will build a Meta data centre in El Paso, Texas. The structure is the story.
Who owns what #
BlackRock and its infrastructure and private-credit arms own 80% of the roughly one-gigawatt project. Meta, the company that will actually run AI inside it, owns just 20% and will lease the campus back. The debt sits with a BlackRock-controlled entity, not with Meta.
That keeps most of the cost off Meta’s books, booked as rent rather than capital spending. It is the same off-balance-sheet trick a Nikkei study just pinned at $1.65 trillion across the five biggest US tech firms.
Meta wrote the template #
Meta has done this before. Its Hyperion site in Louisiana used a joint venture where the credit firm Blue Owl held 80% and Meta 20%. That entity sold $27 billion of bonds last year, the largest private-debt deal on record, and BlackRock bought more than $3 billion of them.
El Paso copies the blueprint. Meta also just agreed to lease a project in Shippingport, Pennsylvania, run by Aligned, the developer BlackRock bought for $40bn. The pattern is consistent: BlackRock owns the buildings, Meta rents the compute.
Fink’s long game #
For Larry Fink, the deal is a payoff. Over the past few years, the $15 trillion asset manager spent about $25 billion buying two private-market firms, Global Infrastructure Partners and HPS, as Bloomberg reported. Both now sit inside BlackRock, and both are backing El Paso. That turns an index-fund giant into an owner-operator. On this deal it does both jobs at once: it originates the asset and sells the debt against it. Fink told analysts last week that the two units were “coming together on the origination side.”
The catch #
The risk is the one every off-balance-sheet AI deal carries. The bonds are long-dated, but the chips inside the building depreciate in a few years, and the leases reportedly run shorter than the campuses they finance. BlackRock is betting AI demand, and Meta’s rent, hold long enough to pay it back.
It also stacks much of the AI build-out inside one firm. Rivals Blue Owl and Blackstone have led the biggest data-centre financings so far, and the bubble talk is getting louder. The El Paso campus is due online in 2028.
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