Pimco Reduces Meta Debt Holdings, Successfully Avoids Losses from AI Bond Market Correction

Pacific Investment Management Company (Pimco) successfully avoided some losses from the AI bond market correction and achieved profits by selling part of its holdings in advance, engaging in interest rate hedging, and forgoing subsequent trades. Pimco had participated in approximately $18 billion of debt financing for Meta's Louisiana data center project and about $10 billion for Oracle's Michigan data center project. Currently, the two related debt positions held by the firm have both been reduced by about 50% compared to before. After buying Meta-related bonds for about 6 to 8 months, Pimco sold approximately $3 billion in bonds when the price was already above par; the price of Oracle-related bonds fell from 98.7 cents at issuance to about 88 cents. Recently, Pimco has become more cautious, opting out of participating in large debt deals related to Broadcom and Anthropic, SoftBank's approximately $11 billion junk bond issuance, and some Oracle data center loans, but still participated in a large financing for SpaceX, subscribing to about $4 billion in debt to support its AI business expansion.