Space Exploration Technologies Corp. (NASDAQ:SPCX) raised $25 billion via senior unsecured notes weeks after raising close to $86 billion via its blockbuster IPO.
SpaceX Debt Sale
In a filing with the Securities and Exchange Commission (SEC) on Tuesday, the commercial space flight giant said that it was offering senior unsecured notes.
A senior unsecured note is a financing method that is not backed by collateral, but often takes precedence over other debt obligations should a company go under.
The offering contains a series of five notes, with the first offering of $7 billion with an interest rate of 5.350% Senior Notes that would be due in 2031.
Consequently, $6 billion worth of Senior Notes with an interest rate of 5.650% will be due in 2033, while $6 billion at 5.875% interest Senior Notes are due in 2036.
SpaceX also said that $2.5 billion at 6.600% Senior Notes would be due in 2046 and $3.5 billion at 6.650% interest Senior Notes would be due in 2056, the filing said.
“The Company intends to use the net proceeds from the Notes offering to repay the outstanding borrowings under its bridge loan facility in full, to pay related fees and expenses, and any remaining amount for general corporate purposes,” SpaceX said in the filing.
Gary Black’s SpaceX Valuation Concerns
Investor Gary Black of The Future Fund LLC has shared his concerns with the space flight company’s valuation, arguing that investors were overpaying for SpaceX stock following the IPO. Black also drew comparisons to chipmaker NVIDIA Corp (NASDAQ:NVDA), citing the company’s lower valuation.
SpaceX’s valuation recently saw close to $400 billion being wiped out following a stock decline, with economist Mohamed El-Erian outlining the profits made and losses incurred by investors.
“Investors who were lucky enough to acquire their exposure at the IPO are currently up 23%, while those who were very unlucky and bought at the high are down almost 25%. Wild!” He said.
According to Benzinga Edge Rankings, SpaceX fails to provide a favorable price trend in the Short, Medium and Long term.
Price Action: SpaceX shares were up 0.54% to $156.94 during the after-hours trading session on Tuesday.
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