This is actually a satirical piece, written as a fake credit rating report. It's mocking how Meta (Facebook's parent company) is using a complex financial structure to keep $27 billion in debt off its official books. Here's what's actually happening in plain English: The basic setup:
Meta is building a massive $28 billion data center in Louisiana Instead of borrowing the money directly (which would show up as debt on Meta's financial statements), they created a convoluted structure with multiple shell companies and a partner called Blue Owl Capital
The trick:
On paper, Blue Owl's company "Beignet" owns 80% of the project and borrows the $27 billion But Meta still guarantees all the rent payments, covers cost overruns, and promises to pay if anything goes wrong So economically, it's Meta's debt—they're on the hook for everything—but legally it's structured so it doesn't appear on Meta's balance sheet
Why the author thinks it's absurd:
Meta controls the project, uses the buildings, guarantees all payments, and bears all the real risk The only reason it's "not Meta's debt" is a technicality in accounting rules The author is essentially saying: "This is obviously Meta borrowing $27 billion with extra steps, and everyone pretends otherwise because the rules allow it"
The whole piece is written as if a rating agency is giving this deal an A+ grade while openly admitting the structure is ridiculous—it's a critique of how financial engineering and accounting rules let big companies hide their true debt levels.
> (…) this is functionally Meta borrowing $27.30 billion for a campus no one else will touch, packaged in legal formality precise enough to satisfy the letter of consolidation rules and absurd enough to insult the spirit.
> The structure maintains a precarious technical separation that, under current interpretations of accounting guidance, allows Meta to keep roughly $27 billion of assets and debt off its own balance sheet while continuing to provide every meaningful form of economic support.
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Meta wants to build a huge AI data center campus in Louisiana. It costs about $28–29 billion. Instead of just borrowing the money itself and putting the debt on its own balance sheet, Meta uses a maze of LLCs and contracts to:
- Get $27.3 billion of debt raised by a special company called Beignet Investor LLC (80% owner of the project).
- Keep that debt off Meta’s official balance sheet, even though:
▫ Meta designs the campus,
▫ pays for overruns,
▫ pays the rent,
▫ guarantees the value at the end,
▫ and will basically be the only user.
In real life, this is basically Meta borrowing to build its own data center. On paper, it’s “someone else’s” debt.
Why is this off-balance-sheet?
The accounting rules say you only have to put an entity on your balance sheet if you “control” it and take on most of the risk/benefit.
Meta’s position is: “We don’t control this JV company, even though we do all the important things and take on all the risk.”
The rating agency in the piece is mocking this. They list all the ways Meta obviously controls and supports the project, then say: under current accounting rules, if Meta insists it doesn’t control it, we all politely pretend that’s true. So the $27B debt doesn’t show up on Meta’s balance sheet, even though economically it’s Meta’s problem.
The "fire sale prices" would be so delicious as to guarantee that the entity(-ies) involved stay solvent as long as meta stays solvent.
So ChatGPT put this sentence in list form and reordered it a bit. AGI is imminent!
And then going to the comments, excitedly no less, to find…this?
Jfc :’(
Wasn't that the root of the 2008 crash? The debt spiral was acceptable because people were making enough money in the present that regulators were powerless to advise against it. In a sane world people often go to jail for decades when doing this at pennies on the dollar.
The problem is that even standard practice, without nefarious intent, can cause massive financial collapse. If, say, the vast majority of economic growth were being focused into such vehicles, the lack of transparency could make people misanalyze the situation and result in bad valuations that collapse when it all becomes transparent.
stevesimmons•55m ago