The busiest day in the history of U.S. corporate bonds! Amazon leads with a bond issuance of $50 billion

The U.S. corporate bond market set a record for single-day issuance on Tuesday, with Amazon being the absolute main player in this issuance wave.

On March 10, according to the Financial Times, on Tuesday, Amazon led nearly a dozen blue-chip companies to flood into the bond market, with a total financing scale exceeding $65 billion, breaking the previous single-day record of $52 billion set by Verizon in 2013.

Insiders revealed that the e-commerce giant launched 11 dollar bonds to investors on Tuesday, targeting $37 billion in financing, significantly up from the initial guidance of $25 billion to $30 billion, due to attracting about $123 billion in subscription demand. Meanwhile, Amazon also plans to initiate its first euro bond issuance as early as Wednesday, targeting €10 billion, with the total financing scale of the two issuances approaching $50 billion.

In addition to Amazon, nearly a dozen blue-chip companies, including Honeywell Aerospace, Toyota Financial Services, and Ford Credit, also concentrated on financing in the market on Tuesday. Analysts pointed out that this situation arose from a brief stabilization of market sentiment more than a week after the outbreak of the Middle East conflict.

This concentrated issuance reflects the high uncertainty of the corporate financing window. Mark Clegg, a senior fixed income trader at Allspring Global Investments, stated, "The window for completing these transactions is getting smaller; as soon as there are signs of market stability, capital market practitioners must act immediately. The market has shifted from weekly planning to hourly planning."

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Amazon's bond issuance is the latest acceleration in financing for AI infrastructure by large tech companies.

In November last year, Amazon completed its first U.S. bond issuance in three years, raising $15 billion. Subsequently, competitor Oracle issued $25 billion in bonds last month, while Alphabet raised over $30 billion through multi-currency issuance in dollars, pounds, and Swiss francs.

In February, Amazon disclosed a full-year capital expenditure plan of up to $200 billion, surpassing competitors like Google and Microsoft, which shocked the market, with most of the funds earmarked for AI and data center infrastructure construction.

CEO Andy Jassy stated during the earnings call last month, "We will actively invest in this area... We want to invest to become a leader in this field." He also expressed confidence in the company's forecast for data center computing power demand and plans to increase investment in self-developed AI chips, robotics technology, and near-Earth orbit satellites.

In terms of pricing, the longest maturity bond in Amazon's dollar bond issuance was a 50-year bond, which was ultimately priced at a spread of 130 basis points over U.S. Treasuries, lower than the initial negotiation of 155 basis points, indicating strong market demand creating favorable pricing power for the issuer.

Nevertheless, the newly issued bonds still offer a considerable premium relative to Amazon's existing bonds in the secondary market, with some investors estimating an additional yield of over 10 basis points—this is a rare occurrence in the current market environment Richard Cheng, head of the Nuveen Investment Grade Corporate Bond team, stated, "We find this very attractive," noting that Amazon's diversified retail revenue sources and its policy of not paying dividends enhance its credit quality