SpaceX Slams Head First Into The Bond Market

The bond market doesn’t give a fuck about narratives. It cares about getting paid back.

SpaceX’s debt honeymoon lasted about as long as a meme stock gamma squeeze.

Traders are already taking meaningful paper losses on SpaceX’s $25 billion bond offering, with losses totaling roughly $305 million relative to Treasuries just days after issuance, according to Bloomberg.

Even veteran credit traders appear surprised by how quickly the deal has deteriorated in the secondary market. One dealer reportedly quoted the longest-dated bonds 0.28 percentage point wider than their original issue spread, while Bloomberg noted that several traders “can’t recall another recent deal that widened this sharply.”

Portfolio manager Tony Trzcinka summed up the mood: “We expected SpaceX to widen from issuance level, but not this much.” He pointed to a combination of weak technicals, the enormous supply, and investors “still scratching their heads over how to price its unique risk profile.”

Imagine that. Bond traders are scratching their heads but this tattooed ex-bartender from Philadelphia has a pretty damn good idea why the bonds have sold off.