Amazon Kicks-Off Eight-Part Euro Bond Sale, Stocks Churn on Oil Rally

Jay Hatfield, CEO & CIO at Infrastructure Capital Management, discusses Amazon's mega bond sale as well as how the market is reacting to news out of Iran.

Amazon.com Inc. is raising €14.5 billion ($16.8 billion) in its euro bond market debut, the biggest ever corporate bond sold in the currency, as Big Tech firms pour money into artificial intelligence infrastructure.

The tech giant boosted the deal from the €10 billion size expected by the market on Tuesday and is offering maturities ranging from two to 38 years, according to people familiar with the matter, who asked not to be identified. So far, investors have placed more than €31.8 billion of orders, marking a record for a corporate debt sale in the currency. The level could change as the deal progresses.

The euro deal follows an 11-part dollar sale on Tuesday which raised $37 billion. Utilizing two currencies and a range of tenors for the deal means that Amazon can tap into various investor bases and spread out its refinancing risk.

It’s the latest in a series of jumbo deals by cloud-computing companies as they invest heavily in AI. Amazon — along with Alphabet Inc., Meta Platforms Inc. and Microsoft Corp. — have forecast capital expenditures of about $650 billion in 2026.

“Amazon is a household name, but investors might ask why are they issuing so much, given historically they are cash rich,” said Saida Eggerstedt, head of sustainable credit at Schroders Investment Management. “We expect the euro bonds will price wider than the dollar bonds after hedges in the longer tranches.” The US portion of the deal drew about $126 billion of orders, one of the largest books ever for a corporate offering, according to people with direct knowledge of the matter. The offering was increased from an initial size range of between $25 billion to $30 billion.

In Europe, the deal is also the first ever eight-part sale in the region, according to data compiled by Bloomberg. The previous record for the number of tranches in Europe was a seven-part sale by LVMH Moët Hennessy Louis Vuitton SE in 2020 to finance its acquisition of Tiffany & Co.

Credit Risk Gauges

Bond sales restarted at a brisk pace globally on Tuesday after being stifled by surging credit risk in the wake of the conflict in the Middle East. Credit risk gauges pulled back after comments from US President Donald Trump sparked optimism that the war with Iran will end soon. The risk-on mood was tempered on Wednesday as oil prices jumped again and after JPMorgan Chase & Co. was said to be restricting some lending to private credit funds.

“A lot of the moves we have seen have been rates reacting to energy prices. Spreads themselves have been very resilient,” said Jack Daley, portfolio manager at TwentyFour Asset Management. “For well-known, higher quality names, they will be able to come to the market and see strong demand.”

Amazon’s deal comes a month after it said it would invest about $200 billion in data centers, chips and other equipment in 2026, topping analysts’ estimates and causing some concerns among equity investors about when huge spending on AI would start to pay off.

Index HeavyweightsIn the credit market, however, there’s huge appetite for hyperscaler deals. Alphabet raised roughly $32 billion in the US and European high-grade bond markets last month, drawing high demand throughout, and especially for an ultra-rare 100-year sterling note.

These large offerings are elevating US tech firms to prominent positions in European credit indexes overnight. Alphabet’s recent deal propelled it to take the spot as the third-largest issuer in the sterling high-grade index, trailing only HSBC Holdings Plc and Barclays Plc, and the fourth-largest in Swiss francs behind stalwarts Nestle SA, Roche Holdings Inc and Novartis AG.This has raised some concerns about the impact on passive corporate bond funds — whether the sector experiences difficulties down the line or not.

JPMorgan is acting as global coordinator for Amazon’s offering and is one of the bookrunners along with Barclays Plc, Bank of America Corp., and Societe Generale SA. The sale is expected to price later today.

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