IMPLICATOR
Meta said Tuesday, July 28, that funds managed by BlackRock will take an 80% interest in the El Paso data center venture while Meta retains the rest. Meta will operate the campus and lease the entire site back as sole tenant. The Meta release put total development costs at about $14 billion.
What Changed
- Funds managed by BlackRock will take an 80% interest in the El Paso data center venture, while Meta retains the rest and stays on as sole tenant and operator.
- Meta contributes land and construction-in-progress assets worth about $2.3 billion, BlackRock about $4.9 billion in cash, against roughly $14 billion in total development costs.
- Meta provides residual value guarantees with an aggregate threshold of about $13 billion that decreases over time, covering specified conditions in the first 16 years of the lease.
- Bloomberg reported that about $12.5 billion of bonds were sold Monday after weaker-than-expected investor demand, at yields closer to those on riskier junk-rated bonds.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
The 80% transaction
At financial close, Meta will contribute land and construction-in-progress assets valued at about $2.3 billion. About $4.9 billion in cash will be contributed by BlackRock through funds that include Global Infrastructure Partners and HPS Investment Partners. Meta will receive a one-time distribution of about $1 billion to align the ownership split.
The transaction was expected to close within days of the announcement.
Meta's lease guarantee
The initial lease runs four years. Meta holds four extension options, allowing a potential 20-year term, according to the company's release.
Meta will also provide residual value guarantees with an aggregate threshold of about $13 billion that decreases over time. If specified conditions are met within the first 16 years, the payment provision would apply. Meta's maximum payment would equal the shortfall between the covered property's fair value at that time and the applicable guarantee threshold.
The bond market
Bloomberg reported that about $12.5 billion of bonds were sold Monday after a nearly weeklong process and weaker-than-expected investor demand. The investment-grade debt offered yields closer to those on riskier junk-rated bonds. The bonds rose in early trading, in part because of the hefty concessions set at pricing.
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At the marketing stage, Sopaipilla Investor, LLC launched $12.3 billion of senior secured notes on July 23 and 24 for the same financing. Sopaipilla Investor is a holding vehicle tied to Project Sopaipilla Holdings, LLC, the joint venture that owns the campus. Meta is not the issuer. S&P Global Ratings assigned a preliminary A+ with a stable outlook, while Fitch assigned an expected AA-(EXP), according to the marketing-stage disclosure.
Bloomberg also noted that the development figure excludes chips and that a 1-gigawatt data center typically costs $35 billion to $50 billion. BofA Global Research put AI-related bond issuance at about $270 billion by early July, nearly double the amount raised in all of 2025.
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Meta shares were down about 10% for the year as investors examined the cost of its AI spending. "The scale of spending still raises valid questions about cash flow, future operating costs, and investment returns, particularly as Meta doesn't (for now) have a large cloud business selling spare capacity to external customers," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
The El Paso build
Meta said the campus, already under construction in northeast El Paso, will provide 1 gigawatt of compute capacity, with capacity beginning to come online in 2028. More than 2,300 workers are on site. The company expects more than 4,000 construction jobs at peak and about 300 permanent operational roles. The Meta release put the venture's total development cost for the buildings and long-lived power, cooling and connectivity infrastructure at roughly $14 billion, funded by both partners in proportion to their ownership stakes. It separately described Meta's own investment in the El Paso campus as more than $10 billion.
Meta reports second-quarter results on Wednesday, July 29, one day after the venture announcement. Bloomberg said the company is likely to update its spending plans on that call.
Frequently Asked Questions
Who owns Meta's El Paso data center campus now?
Funds managed by BlackRock will take an 80% interest in the venture and Meta retains the rest. Meta will operate the campus and lease the entire site back as sole tenant.
How much will the campus cost?
The Meta release put total development costs at about $14 billion for the buildings and long-lived power, cooling and connectivity infrastructure, funded by both partners in proportion to their ownership stakes. Meta separately described its own investment in the El Paso campus as more than $10 billion.
What did Meta agree to under the residual value guarantees?
Meta will provide residual value guarantees with an aggregate threshold of about $13 billion that decreases over time. If specified conditions are met within the first 16 years, Meta's maximum payment would equal the shortfall between the covered property's fair value at that time and the applicable guarantee threshold.
How did the bond financing price?
Bloomberg reported that about $12.5 billion of bonds were sold Monday after a nearly weeklong process and weaker-than-expected investor demand. The investment-grade debt offered yields closer to those on riskier junk-rated bonds.
When will the El Paso campus come online?
The campus is already under construction in northeast El Paso and will provide 1 gigawatt of compute capacity, with capacity beginning to come online in 2028. More than 2,300 workers are on site.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
Marcus Schuler
Editor-in-Chief and founder of Implicator.ai. Former ARD correspondent and senior broadcast journalist with 10+ years covering tech. Writes daily briefings on policy and market developments. Based in San Francisco. E-mail: editor@implicator.ai
