Amazon.com has initiated a multi-currency bond issuance program, aiming to raise between approximately $37 billion and $42 billion from US dollar and euro markets. A key focus of this financing effort is the company's unprecedented euro-denominated bond offering. Amazon plans to issue up to €10 billion in bonds within European markets, structured across eight distinct tranches with maturities ranging from 2 years to 38 years.
On Tuesday, Amazon successfully completed an 11-part US dollar bond issuance, securing $37 billion. This combined bond offering is poised to become one of the largest corporate debt deals in history and represents the latest in a series of major transactions by cloud computing companies financing artificial intelligence infrastructure. Amazon, along with peers such as Google and Microsoft, anticipates collective capital expenditures reaching around $650 billion by 2026.
The dual-currency, multi-maturity structure of the deal allows Amazon to attract diverse investor groups while effectively managing refinancing risks. The previous record for the most tranches in a European market issuance was set by LVMH in 2020 with a seven-part bond sale for its acquisition of Tiffany & Co.
According to sources familiar with the transaction, the US dollar portion attracted approximately $126 billion in orders, ranking among the highest demand levels seen in corporate bond history. The final issuance size was increased from an initial guidance of $25 billion to $30 billion.
The core driver behind this substantial fundraising is Amazon's significant demand for AI infrastructure. The company has stated that to maintain its leadership in generative AI and cloud services, it expects capital expenditures to rise to $200 billion by 2026, exceeding analyst forecasts and raising concerns among some equity investors about the timeline for returns on these AI investments. Funds will be directed toward expanding large-scale data centers, developing proprietary computing chips, and upgrading global network infrastructure.
As global tech giants balance profitability pressures with immense computing needs, Amazon is opting for debt financing to secure long-term, low-cost capital, positioning itself for a sustained AI investment phase.
Global bond issuance activity, previously subdued due to heightened credit risks from Middle East conflicts, resumed quickly on Tuesday. Credit risk indicators declined after political statements suggested a potential de-escalation. By Wednesday, reports emerged that JPMorgan was limiting loans to some private credit funds, slightly dampening risk appetite. Nonetheless, demand for large-scale corporate deals remains strong in credit markets.
Last month, Google raised approximately $32 billion in high-grade bond markets in the US and Europe, with particularly strong demand for a rare 100-year sterling bond. JPMorgan acted as global coordinator for Amazon's bond issuance, with Barclays, Bank of America, and Société Générale serving as joint bookrunners. Pricing for the bond offering is expected to be finalized later today.
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