Back in January, just days before the latest private crash swept across markets, we reminded readers that one of the biggest abusers of private credit SPVs was none other than Meta which as of 2025 was "already neck deep in off-balance sheet debt." We then showed a schematic of its $27.3 billion SPV with private credit ground zero - Blue Owl - titled "Project Beignet", which was created for Meta's Hyperion data center, "none of this touches META's balance sheet." We said to expect "hundreds of billions of these in 2026."

As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl "Project Beignet" for the Hyperion data center. None of this touches META's balance sheet.Expect hundreds of billions of these in 2026https://t.co/794EgSiiZ9pic.twitter.com/7hMyVW6Lno

Little did we know that the first big (ab)user of SPVs in 2026 would be none other than Meta again.

According to Bloomberg, the company formerly known as Facebook, is working on another financing package wrapped as a special purpose vehicle, this time for a data center in El Paso, that could total over $13 billion - or roughly half of the Beignet - underscoring Big Tech’s growing reliance on debt to bankroll the infrastructure behind the AI boom, which as we noted earlier is now expected to reach $1.1 trillion in 2027 capex spending.

Morgan Stanley and JPMorgan are leading the process this time, according to Bloomberg sources. And just like Project Beignet, a large majority of the financing is expected to be in the form of debt, with the rest equity.

And indeed, Bloomberg confirms that Meta’s effort is similar to an almost $30 billion financing package it completed last year for a data center site in rural Louisiana, and which included $27 billion in debt which Meta raised through a special purpose entity known as Beignet Investor, which we discussed in January, and which is named after the popular Louisiana pastry.

The food theme has persisted, and this latest transaction, dubbed Sopaipilla, is named after a fried pastry popular in the Southwestern parts of the country.

But why go the extra mile to come up with another complicated scheme instead of getting secured financing? Simple: there is little direct demand for the paper, and second, Meta is spending more than $10 billion on the data center in El Paso, which is a material jump from prior projections. By the time the data center is completed, the final bill will be even greater.

The gigawatt-sized data center is expected to come online in 2028, and will support more than 300 on-site jobs once completed. Meta has also said its construction needs will grow given the increased investment, and now anticipates 4,000 temporary workers to be on site during the peak construction period.

When Meta sealed Beignet’s deal, where Blue Owl was the co-investor at the Project Beignet Holdings level, the company turned to PIMCO as its anchor lender on the transaction. With Sopaipilla, there is nobody to anchor the deal; instead Morgan Stanley and JPMorgan - who have zero interest in holding on to the debt - will quietly try to syndicate the debt to other capital markets investors.

Source: ZeroHedge News