Meta's default-protection costs hit a record, then eased after its equity plan

Credit markets priced Meta's AI-driven borrowing more harshly after its third-quarter results. Five-year credit default swaps on Meta's debt climbed to a record level, reflecting the cost of insuring against a default, following the first quarterly negative free cash flow since 2012. Meta has since launched its roughly $35 billion underwritten equity offering and a planned $60 billion at-the-market program. Reporting cited in a Microsoft bond story says that equity plan helped pull Meta's CDS spreads back down, and Treasury Secretary Scott Bessent said Meta is choosing to finance with equity. Meta retained about $82 billion in cash and marketable securities at September 30, against roughly $81 billion of long-term debt.

1. Meta's five-year credit default swaps rose 7.6 basis points to a record 114.79 basis points, per Markit data cited by Reuters (Benzinga report, Thursday after the Oct. 21 earnings release).
2. Meta's third-quarter free cash flow was negative $2.12 billion, its first quarterly shortfall since 2012, per Benzinga.
3. Meta held $82.45 billion in cash and marketable securities as of Sept. 30 and carried nearly $81 billion in long-term debt.
4. Meta's roughly $95 billion financing plan, including about $35 billion of underwritten offerings, helped bring its CDS spreads down, per a Benzinga report dated Oct. 29, 2026.
5. Scott Bessent said in a CNBC interview that Meta is choosing to finance with equity rather than debt.
6. The company has not finalized the terms of its planned $60 billion at-the-market program, which could begin in early 2027.