Amazon Is Selling Its First Sterling Bonds in Four-Part Deal

(Bloomberg) -- Amazon.com Inc. kicked off the sale of its debut sterling bonds in a four-part deal, as hyperscalers continue to turn to global debt markets to fuel the artificial intelligence arms race.

The company is selling tranches with maturities ranging from three to 19 years, according to a person familiar with the matter. Initial price discussions are for around 70 basis points over UK gilts for the shortest to around 110 basis points for the longest, said the person, who asked not to be named.

JPMorgan Chase & Co., Barclays Plc, HSBC Holdings Plc and Natwest Group Plc are managing the deal, which is expected to be priced later on Wednesday.

The sale is Amazon's fourth outside the US dollar market so far this year. It tapped euros for the first time in March with the biggest-ever corporate deal in the currency, did a record six tranches in the Swiss franc market, as well as the largest-ever debt offering in the Canadian dollar market. Overall, it's the top bond issuer among so-called hyperscalers in 2026, having sold the equivalent of more than $92 billion in securities.

Amazon's first sterling bond "highlights the broader question for hyperscalers: how much debt can investors absorb as AI investment drives repeated issuance? The appetite remains for hundreds of billions more," said Bloomberg Intelligence analysts Robert Schiffman and Suchi Trivedi.

The company is following a similar path to Alphabet Inc., which has been around the world for new funding sources for its AI spending. The Google parent company raised £5.5 billion ($7.5 billion) of sterling debt in February, including a ultra-rare 100-year bond, pulling in nearly £30 billion in demand. Alphabet has since tapped the Australian dollar and Japanese yen markets.

The BI analysts also highlighted the sterling bond market's limited supply of large-cap technology company debt, which should support demand for Amazon's sale, though the 19-year tranche is a test of investors' willingness to extend duration for AI-linked capital needs.

Investors are starting to push back on the deluge of AI related debt. More recent sales have attracted weaker demand and priced at higher costs compared to those sold earlier in the year.