The busiest day in the history of U.S. corporate bonds! Amazon leads the issuance of $50 billion in debt

On Tuesday, the U.S. corporate bond market set a single-day issuance record, with Amazon playing the leading role in this wave of issuance.

According to the Financial Times on March 10, on Tuesday, Amazon led nearly a dozen blue-chip companies to flood into the bond market, with a total financing scale exceeding $65 billion, breaking the single-day record of $52 billion set by Verizon in 2013.

Sources familiar with the matter revealed that this e-commerce giant issued 11 dollar-denominated bonds on Tuesday, aiming to raise $37 billion, significantly raising the initial guidance of $25-30 billion due to approximately $123 billion in subscription demand. At the same time, Amazon also plans to launch its first euro bond issuance as early as Wednesday, targeting €10 billion, with two issuances totaling nearly $50 billion.

Besides Amazon, more than a dozen blue-chip companies including Honeywell Aerospace, Toyota Financial Services, and Ford Motor Credit also entered the market for financing on Tuesday. Analysts pointed out that this situation reflects a brief stabilization in market sentiment after more than a week since the Middle East conflict erupted.

This concentrated issuance highlights the high uncertainty in corporate financing windows. Mark Clegg, senior fixed income trader at Allspring Global Investments, said, “The window to complete these deals is getting smaller and smaller. As soon as there are signs of market stability, capital market participants must act immediately. The market has shifted from weekly planning to hourly planning.”

Tech Giants’ AI Arms Race Drives Borrowing Surge

Amazon’s bond issuance is the latest acceleration in large tech companies’ financing for AI infrastructure.

In November last year, Amazon completed its first U.S. bond issuance in three years, raising $15 billion. Since then, competitors like Oracle issued $25 billion in bonds last month, and Alphabet has raised over $30 billion through multi-currency issuances in dollars, pounds, and Swiss francs.

In February this year, Amazon disclosed a capital expenditure plan of up to $200 billion for the year, surpassing competitors like Google and Microsoft, causing market shock. Most of this funding will be used for AI and data center infrastructure development.

CEO Andy Jassy stated during last month’s earnings call, “We will actively invest in this area… We want to invest to become a leader in this field.” He also expressed confidence in the demand for data center computing power and plans to increase investments in self-developed AI chips, robotics, and near-earth orbit satellites.

In terms of pricing, the longest maturity bond in Amazon’s dollar bond issuance was 50 years, priced at a spread of 130 basis points over U.S. Treasuries, lower than the initial negotiation’s 155 basis points, demonstrating strong market demand giving issuers favorable bargaining power.

Despite this, the newly issued bonds still offer a considerable premium over Amazon’s existing secondary market bonds, with some investors estimating an additional yield of over 10 basis points — a rare occurrence in the current market environment.

Richard Cheng, head of Nuveen’s investment-grade corporate bond team, said, “We find this very attractive,” noting that Amazon’s diversified retail revenue streams and its policy of not paying dividends enhance its credit quality.

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