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

How's the CIO Doing? It's in the Data

By: Special Guest    1/24/2017

As digitalization moves from an abstract term to a central part of the business strategy, CIOs are being called on to provide strategic insight and le…

Read More

Eight Ways We'll See Drones Used in the Year Ahead

By: Kayla Matthews    1/24/2017

A report from NPD revealed that drone sales have tripled over the past year to about $200 million. The trend will continue, so much so that 2017 could…

Read More

The Paradox of Twitter's Value in the Trump Era

By: Doug Mohney    1/24/2017

Once upon a time - the end of 2013, to be precise - Twitter was valued at nearly $40 billion. Today, it's "only" at $11.68 billion, with a majority of…

Read More

How Apple Helped Tech Transition to Mainstream

By: Special Guest    1/24/2017

The last 10 years have seen more technological change than any 10 years before it. But when anything hits the mainstream, whether it be tech or dietar…

Read More

Apple's Dangerous Gambit With Qualcomm

By: Rob Enderle    1/23/2017

Apple has one of the strongest legal teams in the segment; however, when a company starts using litigation offensively, it generally points to a probl…

Read More