Amazon Enters Sterling Credit Market for First Time With New Bonds

By Miriam Mukuru

Amazon tapped the sterling credit market for the first time on Wednesday with a four-part bond supply.

The U.S. technology giant has launched 3-year, 6-year, 12-year and 19-year sterling-denominated bonds. It will raise 1.25 billion pounds ($1.69 billion) from the 3-year bonds, and 1 billion pounds each from the 6-year, 12-year and 19-year bonds.

The latest pricing on the 3-year bond is 53 basis points above U.K. government bonds, known as gilts; 75 basis points above gilts for the 6-year bond; and 93 basis points above gilts for the 19-year bond, according to LSEG.

"The high level of demand [for the bonds] shows that investors are comfortable lending to one of the world's largest technology companies, even while U.K. borrowing costs remain elevated," said Lale Akoner eToro's global market strategist.

U.S. companies are increasingly issuing bonds in the sterling market due to elevated debt supply in the U.S. They are also aiming to diversify their funding base by issuing bonds in different regions and currencies.

Alphabet, Google's parent company, supplied a 100-year sterling bond in February.

Rising needs to finance infrastructure projects and data centre construction are forcing big AI service providers to issue large amounts of debt, which is often long-dated.

"Large U.S. dollar bond deals typically come with large concessions", meaning that investors are demanding a high yield in return for buying the bonds, CreditSights analysts said. "As a result the hyperscalers have been diversifying their funding sources."

At the same time, governments are also issuing more debt, leading to intense competition for funds which has pushed many long-dated government-bond yields to multi-decade highs.

U.K. 30-year government bond yields surged to 5.921% last week, the highest level since 1998.

CreditSights analysts favor Amazon's debut sterling bonds.

"We expect Amazon's sterling bonds to provide compelling all-in yield and diversification benefits into AI--which is understated in the sterling index," the analysts say.

Proceeds from the bond issuance could go towards capital expenditure and mergers and acquisitions, CreditSights analysts said.

Amazon and Alphabet's sterling bonds remain attractive as the companies are in healthy financial positions, but investors should get extra compensation given the anticipated increase in debt supply, the analysts said.

Write to Miriam Mukuru at miriam.mukuru@wsj.com

(END) Dow Jones Newswires

September 09, 2026 09:36 ET (13:36 GMT)