Amazon Seeks To Raise $7B Via 2022's Second Bond Offering

BY Benzinga | CORPORATE | 11/29/22 11:09 AM EST
  • Amazon.Com, Inc (NASDAQ:AMZN) looked to sell investment-grade bonds for general corporate purposes, its second offering in the dollar market this year.
  • Amazon issued senior unsecured bonds in up to five parts, Bloomberg reports.
  • The most extended portion of the offering, a 10-year security, may yield 1.15 percentage points over Treasuries.
  • Also Read: Amazon Weighs Paring Back On Unprofitable Businesses Like Alexa; Introduces New Warehouse Robot To Cut Down On Lag
  • The target size of the offering is $7 billion.
  • Amazon may use the offering proceeds to repay debt, fund acquisitions, and share buybacks. 
  • Amazon last sold bonds in April, raising $12.75 billion, the company's first offering in about a year. 
  • Amazon is among ten companies looking to sell the debt on Tuesday ahead of anticipated volatility over the next few days.
  • The sale also comes as credit fundamentals create an optimistic backdrop for issuing debt.
  • Amazon's total debt load now exceeds $70 billion.
  • Amazon held $58.9 billion in long-term debt and $58.7 billion in cash and equivalents as of September 30.
  • Price action: AMZN shares traded lower by 2.21% at $91.69 on the last check Tuesday.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.