Global Market: Amazon diversifies debt funding with first Sterling bond offering

Amazon began marketing sterling-denominated bonds for the first time on Wednesday, as major technology companies accelerate fundraising across global currencies to finance heavy investment in artificial intelligence infrastructure.

According to Reuters, citing three banks managing the transaction, Amazon set initial price guidance at around 70 basis points above comparable British government bonds for a three-year tranche.

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The company also indicated initial spreads of around 90 basis points over UK government bonds for a six-year bond, 105 basis points for a 12-year bond and 110 basis points for a 19-year bond, according to a memo circulated by the banks.

The bond sale is expected to be priced later on Wednesday.

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Amazon's move comes as so-called hyperscalers step up borrowing to fund the rapid expansion of data centres, computing capacity and other infrastructure needed to support the artificial intelligence boom.

Reuters reported that major technology companies have increasingly turned to bond markets outside the United States this year, raising funds in currencies including euros, Swiss francs and yen. The strategy allows companies to diversify their sources of financing as spending on AI infrastructure drives their funding requirements higher.

The expansion of AI-related capital expenditure has pushed large technology companies to seek financing on a broader range of debt markets, while investors have gained access to highly rated corporate issuers across multiple currencies.

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