Comment by pcurve

4 months ago

This article doesn't mention it, but PIMCO is lead lender

"Pacific Investment Management Co. (PIMCO) is the anchor lender on the deal. The debt, which matures in 2049, is fully amortising and has been rated A+ by S&P. The bonds were priced at around 225 basis points over U.S. Treasuries."

https://pe-insights.com/blue-owl-and-meta-close-record-30bn-...

Oof.. I don't know about this one.

11 comments

pcurve

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rsynnott  4 months ago

Oh, we're doing this again, are we?

Ugh. A year ago, I was (a) fairly confident that the AI bubble would burst, but (b) fairly confident that contagion would be limited; a bunch of startups would evaporate, and some VCs would be badly burned or fail, but the broader economy would largely shrug and carry on.

Based on this sort of thing, I'm not sure I still believe (b).

  • pcurve  4 months ago

    What I find fascinating is, everyone is making the same exact points:

    1. Yes, there is a bubble, but it's not the same. Companies are profitable.

    2. It may burst, but this may go on for another 2+ years. No one knows.

    3. Even after the burst, we would have valuable AI infrastructure, just like all the excess internet capacities after the Dotcom.

    Base on this, I think the bubble will burst sooner. Sentiment can shift real quick.

lazide  4 months ago

Pimco - the company that originated all those bonds every pension fund is sitting on.

  • consumer451  4 months ago

    I am 99.0% percent sure that the AI bubble burst is coming. I was only 95% sure until very recently.

    Does this mean that this investment spreads the bubble burst risk into people's pension funds? (those lucky enough to have such a thing) Or, not necessarily?

    • Ekaros  4 months ago

      I would think so. I don't think pension funds are always exactly smart money. They have lot of pressure to make numbers work so they are after anything that sounds reasonably like it will make them work. And that can work until it does not.

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