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- The Weekly Roundup, 8.21.25
The Weekly Roundup, 8.21.25
Illiquid Insights
August 21, 2025
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Here’s a summary of the week’s most interesting stories:
Restaurants are feeling the strain of inflation
Higher menu prices are driving declining same-store sales
Bankruptcies in 2025 include Red Lobster, TGI Fridays and Hooters
Private credit is funding Meta’s newest data center project
Private asset managers to finance $29Bn Louisiana data center expansion
Watershed moment given investment grade borrower and deal size
US Government interest expense is snowballing
Higher rates and debt have doubled interest expense since 2021
Interest is now the second largest federal expenditure
1. Americans Are Eating Out Less
Publicly traded quick service chains Cava, Chipotle and Sweetgreen reported earnings this past week. The results were not encouraging.
Same store sales (“SSS”), or growth excluding new locations, sharply declined for all three chains in Q2’25, continuing the downward trend since 2024.
The drag on restaurants has been driven by the US economy’s boogeyman: inflation.
Restaurant prices have outpaced total inflation since the pandemic. The average price of a McDonald’s menu item has increased ~40% since 2019.1
Restaurant prices have outpaced total inflation since 2022.
Higher prices make it increasingly difficult for restaurants to attract stretched consumers. This has especially pressured legacy chains, which rely on value to win customers.
Some of the restaurants forced to file for bankruptcy in 2025 include TGI Friday’s, Red Lobster and Hooters.
And as the economy faces a slowdown, the restaurant industry’s challenges may just be getting started.
2. Meta Chooses Private Markets Over Wall Street
In early August, Meta announced the $29Bn financing of a data center expansion project in Louisiana.
The most surprising aspect of the announcement was not the financing amount, but the source.
Meta announced the deal would be led by PIMCO and Blue Owl. It’s been reported that the deal will be funded through an SPV structure with $26Bn of debt and $3Bn of equity.2
Tapping private markets is very atypical for large-cap, investment grade borrowers, which traditionally rely on publicly traded stock, bond or loan offerings marketed by investment banks.
The deal is encouraging for private credit, as it looks to grow beyond its traditional market of LBO financings.
Meta’s financing is notable for involving i) an investment grade borrower, ii) the hottest sector in the economy and iii) a massive $29Bn deal size.
Meta’s turn to private financing also highlights the advantages of private credit:
Highly flexible structure and terms
Confidence in execution
No public disclosures
Reportedly, Meta valued the confidentiality of a private issuance over a public process due to the secretive nature of its AI and data center technology.
As the AI build-out continues, this could be the beginning of private credit’s expanding role in capital markets.
3. America’s Interest Bill is Exploding
From 2008 to 2022, US monetary policy was defined by ultra-low interest rates. Low rates allowed the US government to run higher deficits funded by cheap borrowing.
However, the sharp increase in the Federal Funds rate since 2022, combined with growing federal deficits, has doubled interest expense in just a few years.
US Government interest expense has rapidly increased since 2022.
Interest is now the second largest expense in the Federal budget.3
As interest grows, it crowds out spending that could be used for productive investment like healthcare or education.
Higher interest means higher deficits, which require even more borrowing. From this, interest and debt can quickly snowball.
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