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Bloomberg
Amazon.com Inc sold $12.75 billion of investment-grade bonds for general corporate purposes that may include repaying debt as well as funding acquisitions and share buybacks in its first note sale in about a year.
The online retail giant issued senior unsecured bonds in seven parts. The longest portion of the offering, a 40-year security, yields 1.3 percentage points
over Treasuries after initial talks of around 1.55 percentage points, according to a person with knowledge of the matter, who asked not to be identified as the details are private.
Amazon last tapped the US debt market when it sold $18.5 billion of bonds in May, also for general corporate purposes that included possible refinancing of debt and share repurchases. The 40-year security on that deal priced to yield 95 basis points over Treasuries.
While yields have jumped since its last issuance, selling debt now makes sense because borrowing costs may be headed even higher as the Federal Reserve fights inflation and tightens the money supply.
Even as it once again accesses high-grade debt markets, Amazon’s credit quality is likely to continue on an improving trajectory, , senior credit analyst at Bloomberg Intelligence, wrote in a note.
The company’s balance sheet is growing and with $50 billion of outstanding bonds, it could come close to sector leader Apple Inc’s debt of over $100 billion in the intermediate
term, he added.
Amazon’s cash, cash equivalents and marketable securities stood at an all-time high of
$96 billion at the end of 2021.
The company also has aggressive business ambitions, including opening new warehouses, expanding its brick-and-mortar grocery operations and sending broadband-streaming satellites into space.