Amazon Seeks $12 Billion From First US Bond Sale Since 2022

(Bloomberg) — Amazon.com. Inc. is seeking to raise about $12 billion through a bond sale — its first such deal in US dollars in about three years — adding to a wave of massive technology debt offerings as companies race to fund artificial intelligence infrastructure.

Proceeds from the offering may be used for everything from acquisitions and capital expenditures to share buybacks, according to people with knowledge of the matter. Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are managing the bond sale, the people said, asking not to be named discussing private details.

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Monday’s sale comes after Google parent Alphabet Inc. earlier this month sold $25 billion of debt in the US and Europe. Meta Platforms Inc. issued $30 billion of corporate bonds last month, the biggest such offering of the year, while Oracle Corp. raised $18 billion through high-grade notes in September.

The issuance spree from the tech companies has helped push global issuance to a record of more than $6 trillion this year. JPMorgan Chase expects the fresh wave of spending to finance investments in artificial intelligence to drive issuance in the US high-grade-grade market to a record $1.81 trillion next year.

Amazon is selling investment-grade notes in as many as six parts, the people said. Initial price discussions for the longest portion of the deal, a 40-year bond, are for a premium of about 1.15 percentage points above Treasuries, the people added.

Goldman Sachs, JPMorgan and Morgan Stanley declined to comment. Amazon didn’t immediately respond to a request for comment.

Amazon is the world’s largest seller of rented computing, which is critical to powering artificial-intelligence systems. Like its biggest rivals, the company has been investing heavily in data centers and chips to build and run AI models capable of generating text or images and automating processes.

Amazon’s capital expenditures are expected to top $147 billion next year — roughly three times the level seen as recently as 2023 — according to the average of analyst estimates compiled by Bloomberg. This is an “opportune” time for Amazon, which has so far relied primarily on its own cash flow to fund investments, to incorporate debt into its capital structure to expand funding flexibility, JPMorgan wrote in a note last week.

“Amazon could also look to private credit markets to structure financing around its extensive data center footprint,” JPMorgan added, citing the potential for sale-leaseback or joint-venture-style vehicles.

The power capacity of Amazon’s data center fleet has doubled since 2022, and Chief Executive Officer Andy Jassy has said he expects it to double again by 2027. Earlier this month, the company’s cloud unit signed a $38 billion deal to supply OpenAI access to hundreds of thousands of Nvidia Corp. graphics processing units as part of a seven-year computing deal.

Amazon last tapped the US high-grade market in November 2022 when it raised $8.25 billion.

–With assistance from Robin Ajello.

(Updates with more details throughout)

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