In fact, an interest rate of 0.4% represents a cost substantially lower than the 1.9% that Amazon had to offer in 2017 when it placed its three-year bonds to finance the acquisition of the Whole Foods Market supermarket chain and breaks down the previous minimum of 0.45% achieved in 2012 and 2013 by multinationals such as Apple, IBM and Walt Disney.
Likewise, the new Amazon bonds with maturities of 7 and 10 years have coupons of 1.2% and 1.5%, respectively, also the lowest in the US corporate bond market and beating the previous minimum established by the chain. distribution costco at the beginning of the year, according to Refinitiv data. On its side, the coupon of 0.8% of Amazon’s 5-year bond would have equaled the minimum of the equivalent debt issued by Pfizer.
Amazon’s offering of paper, which included maturities of 30 and 40 years, was overwritten more than three times, according to sources consulted by the newspaper.
In this sense, ‘FT’ highlights the appetite of investors for lending to ‘blue chips’ after the Federal Reserve has provided unprecedented support to financial markets, with its intervention in March, which included the promise to buy bonds corporate. The intervention of the US central bank has helped reduce the costs of corporate loans, which had soared to their 10-year high due to the pandemic.
Thus, the amount of corporate bond issues in the US has already exceeded one trillion dollars, with a record growth rate.
“Companies are looking at these returns and thinking they should be issuing. This is an ideal opportunity to go in and refinance existing bonds or add new debt,” Peter Tchir, head of macro strategy at Academy Securities, told the newspaper.
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