What Will Amazon Do with its Latest Bond Offering?

By Rich Steeves November 26, 2012

If you like your financial news shaken, not stirred, I have three words for you:

Bond. Amazon bonds.

In 1997, Pierce Brosnan was James Bond, and Amazon was considered a junk-rated bond issuer.

How things have changed.

Nowadays, Daniel Craig is James Bond and Amazon is a powerhouse in the industry, and planning to sell three-, five- and 10-year bonds in a deal that is expected to soar into the $2.5 billion range.


Image via Shutterstock

The proceeds will be for general corporate purposes, such as the purchase of Amazon’s corporate headquarters, according to Moody’s.

"Demand should be strong because it's a new name for the marketplace," Sean Simko, head of global fixed-income management at SEI Investments, told foxbusiness.com. Experts expect the bonds to yield .5, .75 and 1.05 percent over the three-, five- and 10-year Treasury rates.

But not everyone is excited about the offering. Andrew Hofer, portfolio manager at Brown Brothers Harriman in New York, is not impressed. "This Cyber Monday promotion is still too expensive, as much as we admire the company," he said.

Moody’s cited online retails sales as a strength for the company, helping boost its credit rating, but other factors are working against it, and Moody’s gave Amazon a AA-minus rating.

Aside from the corporate headquarters, the mind boggles at the thoughts of what Amazon might do with billions of dollars. Perhaps it is planning for the zombie apocalypse, or looking to ship extra Hostess goodies to Colorado and Washington State. Or maybe the company wants to promote books by independent authors. Only time will tell.




Edited by Braden Becker

TechZone360 Web Editor

SHARE THIS ARTICLE
Related Articles

Augmented Reality Hits the Road: Jaguar vs. Mini

By: Rob Enderle    4/20/2015

Earlier this year Jaguar announced they were working on an augmented reality system for their cars, and last Sunday BMW's Mini organization-using Qual…

Read More

FM Radio in Norway Gone After 2016

By: Steve Anderson    4/20/2015

If the headline sounds shocking, it's likely because FM radio has been a technological staple for decades. We turn to it for news, weather reports, an…

Read More

Verizon FiOS Makes the First Real Move Toward A La Carte

By: Tara Seals    4/20/2015

The move to a la carte television-where customers choose what networks to have in their subscription packages-has been a hot topic for a couple of yea…

Read More

Drunk on Authenticity

By: TMCnet Special Guest    4/20/2015

Millennials are drinking. That in and of itself might come as a shock to those of us a bit more long in the tooth. While the older end of generation X…

Read More

Sprinting Toward Productivity with WPaaS

By: Erik Linask    4/20/2015

The workplace is changing before our eyes. It is no longer about a physical environment. Getting up and going to work in the morning no longer means p…

Read More