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Amazon Hits Debt Market

 1 min read / 

The world’s largest online retailer raised $16bn in bonds to pay for its $13.7bn takeover of Whole Foods.#

Editor’s Remarks: Amazon has not been a big issuer of bonds in the past – its last one was in 2014, and it currently only has $7.8bn of debt outstanding. The $16bn issue, across seven tranches ranging from 3 to 40-year maturities, will be used to fund its entry into the grocery business and has been well received by investors despite general bond market weakness. This will be the third big corporate debt issue this year after AT&T raised $22.5bn and British American Tobacco $17.25bn. The 10-year tranche has been priced at a 3.17% yield, compared with 3.84% for the 10-year paper when it last issued $6bn of debt in 2014. Investors seem comfortable with Amazon’s strategy to blend Whole Foods’ bricks-and-mortar grocery stores with its online business, and Amazon has the scale and balance sheet to benefit from low-interest rates available in the bond market.

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