Key facts
- Amazon raised £4.25 billion ($5.76 billion) in its first sterling bond sale.
- Investor demand for the four-part deal exceeded £10.65 billion.
- The issuance included bonds with maturities of three, six, 12, and 19 years.
- Yields ranged from approximately 5.2% on the 3-year bond to 6.7% on the 19-year bond.
- The move diversifies Amazon's funding sources outside the U.S. to finance AI investments.
Amazon raised £4.25 billion ($5.76 billion) from its first-ever sterling bond sale on Wednesday, slightly more than initially expected, according to a bank managing the deal. The issuance, which saw final demand exceeding £10.65 billion, is the latest example of U.S. hyperscalers diversifying their funding sources outside the U.S. to finance the AI boom.
Hyperscalers have increasingly been selling bonds in various currencies, including euros, Swiss francs, and yen, to meet their substantial capital needs. They have already issued over $200 billion of debt this year, more than doubling the total from 2025, according to LSEG data.
The Amazon deal included £1.25 billion from three-year bonds and £1 billion each from six-, 12-, and 19-year bonds. The bonds priced with yields ranging from approximately 5.2% on the three-year issue to 6.7% on the 19-year issue. Sterling is the latest currency Amazon has added to its funding program, having previously tapped the euro, Swiss franc, and Canadian dollar bond markets.
Google-parent Alphabet was the first hyperscaler to tap the sterling market in February, raising £5.5 billion from a five-part deal, including a rare 100-year bond. However, Amazon's deal saw lower investor demand compared to Alphabet's, with demand exceeding the amount Amazon was set to raise by about 2.5 times, versus fivefold demand for Alphabet's sale. Gordon Shannon, partner at TwentyFour Asset Management, noted that the lower demand reflects investor concerns about sustained borrowing by hyperscalers, indicating that demand is not unlimited.
The European Central Bank had previously warned that the push by hyperscalers into the euro zone bond market could potentially crowd out other borrowers and increase their financing costs. Amazon's bond sale is its first since July, when it received weaker demand than in the past for a $25-billion offering, signaling that the heavy pace of hyperscaler borrowing may be testing investor demand limits.
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