Amazon seeks at least $25 billion in eight-part bond sale
Amazon is returning to debt markets to fund corporate needs as AI-related capital spending continues to rise, people familiar with the matter told CNBC.
By Marcus V. Thorne · Markets Editor
· 3 min read
Amazon plans to raise at least $25 billion through an eight-part bond offering, people familiar with the matter told CNBC’s David Faber, adding another large financing to support the company’s investment program tied in part to artificial intelligence. The company also told underwriters it does not plan to sell more debt this year, according to people familiar with the matter who spoke to CNBC on condition of anonymity because the details are private.
The financing was disclosed Tuesday in a filing with the Securities and Exchange Commission, although Amazon did not state the size of the transaction in that document. Bloomberg first reported the value of the bond sale, according to CNBC.
A bond sale allows a company to borrow from investors by issuing debt securities, usually across several maturities. In an eight-part transaction, the issuer typically offers separate tranches with different repayment dates and coupon structures, giving investors a range of duration and yield exposure while giving the company access to a broad pool of capital in one market operation.
Amazon’s return to the bond market comes after the company raised about $54 billion in bonds earlier this year in the United States and Europe, CNBC reported. The company followed that with a C$10 billion bond raise in Canada in June, according to the same report.
An Amazon spokesperson told CNBC that proceeds from the latest offering will be used for general corporate purposes. Those uses could include support for investments, funding future capital expenditures and repaying debt, the spokesperson said.
“We regularly evaluate our operating plan and make financing decisions, like issuing bonds, accordingly,” the spokesperson told CNBC.
AI spending and balance-sheet funding
The transaction lands as major technology companies continue to direct large amounts of capital toward artificial intelligence infrastructure. For Amazon, that spending is tied to the computing capacity and related facilities needed to support AI services, including cloud workloads through Amazon Web Services.
Debt issuance can help fund capital expenditure without immediately drawing down cash balances or relying on equity issuance. For investment-grade borrowers, large bond transactions can also extend maturities and lock in funding for projects whose costs may be incurred before revenue is realized.
The company’s message to underwriters that it does not expect to issue additional debt this year gives investors a signal about near-term supply from Amazon, according to the people familiar with the matter cited by CNBC. Such guidance can matter in corporate bond markets because the expected amount of future issuance from a borrower may affect how investors assess pricing, allocation and relative value.
Amazon did not disclose pricing terms, maturities or the final size of the deal in the SEC filing cited by CNBC. The ultimate proceeds and structure may depend on investor demand and market conditions at the time of sale.
This story draws on original reporting from CNBC.
