NEW YORK: For Larry Fink, BlackRock Inc’s more than US$12bil debt sale for a Meta Platforms Inc data centre is the result of years spent transforming a public investments giant into a heavy hitter in private markets too.
The coming sale brings together investors from Fink’s two big recent acquisitions – US$12.5bil for Global Infrastructure Partners (GIP) and US$12bil for HPS Investment Partners – and pushes BlackRock further into an increasingly competitive landscape to help finance the artificial intelligence (AI) boom.
Rivals Blue Owl Capital Inc and Blackstone Inc have so far led the biggest data centre financing.
The deal is also an example of how senior executives at BlackRock are planning to leverage the two units for potential future transactions, according to people with knowledge of the matter.
GIP has historically focused on investing in infrastructure projects, while HPS built its business on transactions, including complicated credit financing.
Under the agreement with Meta, funds managed by GIP and HPS own an 80% stake in Project Sopaipilla Holdings, the official name of the joint venture operation with Meta.
That ownership stake is the entity borrowing in debt markets now.
The remaining 20% of the venture is held by Meta, which is building the data centre campus.
Just days before the marketing for the bond sale kicked off for the project, Fink said that GIP and HPS were “coming together on the origination side”.
Speaking last week after the firm posted its quarterly earnings, the BlackRock chief executive officer told analysts the deal pipeline for the two units was “building in ways that reinforce our conviction in the combined platform, particularly in digital infrastructure”.
GIP and HPS have an equity stake in the project, in addition to the debt being raised, the people said, asking not to be identified as the details are private.
The gigawatt-sized data centre is expected to come online in 2028, and will support more than 300 on-site jobs once completed.
Managing directors Wes Altman, of GIP, and Garrett Cockren, of HPS, are both slated to speak to potential buyers of the more than US$12bil in bonds backing the project, separate people with knowledge of the matter said.
JPMorgan Chase & Co and Morgan Stanley yesterday started marketing the sale.
For Meta, snaring BlackRock as a partner is being viewed internally as a major win, according to people familiar.
Representatives for BlackRock and Meta declined to comment.
The structure of BlackRock’s deal with Meta is similar to the hyperscaler’s partnership with Blue Owl for its Hyperion project in rural Louisiana.
Blue Owl held 80% of the venture and Meta the remaining 20%, allowing the tech company to keep the debt off its balance sheet while leaving it in charge of day-to-day operations.
This month Meta expanded Hyperion beyond the portion covered by the joint venture.
BlackRock’s deal follows on the heels of the firm’s move to invest more in AI technology and data centres, including its October agreement to acquire Aligned Data Centres in a US$40bil deal.
That deal, which is expected to close soon, involved GIP, BlackRock partners, including Microsoft Corp and Nvidia Corp, and MGX, a technology investment platform started by Abu Dhabi sovereign wealth fund Mubadala Investment Co and Emirati AI company G42. — Bloomberg
