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Amazon.com Inc
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Amazon offers $18.5 billion debt


Amazon.com Inc. is selling bonds to refinance debt and re-buy stocks at a time when low borrowing costs are too tempting to resist, even for a company with tens of billions of dollars in cash.

The online retail giant is issuing $18.5 billion in debt in eight tranches, according to people with knowledge of the matter.

The longer-term part, a 40-year instrument, will yield 95 basis points on Treasury bonds, after a value of around 115 basis points was initially discussed, people said, who asked not to be identified because the details are confidential.

Companies have been taking advantage of the open bond markets and spreads in at least three years to get cheap loans, even if they don't need them. With the economy recovering from the pandemic, investment-grade U.S. companies are increasingly tempted to spend their cash reserves on acquisitions and dividend increases, or borrow even more money.

The $18.5 billion debt sale is Amazon's largest bond placement, and the second largest this year after the $25 billionVerizon Communication Inc. offered in March. The company was said to originally aim to place $15 billion.

Amazon recorded record quarterly results and provided a higher sales forecast for the current quarter than analyst estimates.

Cash, cash equivalents and marketable securities amounted to $73 billion at the end of March, close to an all-time high.


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Friday, March 29, 2024