Amazon Engages Banks for First Sterling Bond Sale to Fuel AI Growth
On Tuesday, Amazon engaged banks for its inaugural sterling bond issuance, as indicated by a memo. This move comes as hyperscalers are eager to secure funding in various currencies to support the burgeoning AI sector. The tech giant is seeking to issue bonds with maturities of 3 years, 6 years, 12 years, and 19 years, as indicated in a memo from one of the banks facilitating the transaction.
The transaction may occur as soon as Wednesday, contingent upon market conditions, the memo indicated. It was not specified the amount of capital Amazon aims to raise through the bonds. Hyperscalers such as Amazon are progressively issuing bonds in various markets beyond the U.S. this year, including euros, Swiss francs, and yen, as they aim to diversify their financing sources in light of substantial funding requirements for the AI transition.
The scale of their debt issuance is already testing the limits of investor demand, particularly in the U.S. dollar bond market, with some large bond buyers warning over the summer that the market is showing signs of indigestion. Amazon’s sterling bond sale comes on the heels of Google-parent Alphabet’s recent activity, which successfully raised £5.5 billion ($7.44 billion) through a five-part deal in the currency back in February, notably featuring a rare 100-year bond.
