Amazon Enters Sterling Bond Market to Boost Funding as AI Drives Debt Demand
By Yoruk Bahceli
Amazon's Entry into the Sterling Bond Market and the Impact of AI on Corporate Debt
LONDON, Sept 8 (Reuters) - Amazon started selling sterling bonds for the first time on Wednesday, according to the banks managing the deal, as hyperscalers rush to diversify their funding sources to finance the AI boom.
Hyperscalers Diversify Funding Sources
The deal is the latest example of how hyperscalers are increasingly selling bonds across markets outside of the U.S. this year, from euros to Swiss francs and the yen, as they make sure they can raise capital wherever they can, given their huge funding needs.
Record Debt Issuance in 2025
They have already issued more than $200 billion of debt this year, more than doubling from the whole of 2025, according to LSEG data.
Details of Amazon's Sterling Bond Deal
Pricing and Maturity Structure
Initial price guidance on the Amazon deal was set at around 70 basis points over British government bonds on a three-year bond, around 90 basis points over for a six-year bond, around 105 basis points over for a 12-year bond and around 110 basis points over for a 19-year bond, according to a memo sent by three of the banks seen by Reuters.
The deal will price later on Wednesday, the memo said.
Expansion of Amazon's Funding Programme
The pound is the latest currency Amazon has added to its funding programme after tapping the euro and Swiss franc bond markets.
Market Reactions and Broader Implications
Concerns from the European Central Bank
The European Central Bank warned earlier in September that hyperscalers' push into the euro zone bond market could potentially crowd out other borrowers and push up their financing costs.
Alphabet's Precedent in Non-U.S. Dollar Bonds
Google-parent Alphabet, which has led the way in selling non-U.S. dollar bonds, was the first hyperscaler to tap the sterling market in February, when it raised £5.5 billion from a five-part deal, including a rare 100-year bond. It has also raised Japanese yen, Canadian and Australian dollar debt this year.
Amazon's Recent Bond Issuance
It is Amazon's first bond sale since July, according to LSEG data, when it received weaker demand than in the past for a $25 billion offering, in one of several signs that the heavy pace of hyperscaler borrowing started to test the limits of investor demand.
(Reporting by Yoruk Bahceli; Editing by Amanda Cooper)
