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

On Tuesday, the US corporate bond market set a record for single-day issuance volume, with Amazon being the absolute leader of this issuance surge.

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

Insiders revealed that the e-commerce giant offered investors 11 dollar-denominated bonds on Tuesday, targeting $37 billion in financing, a substantial increase from the initial guidance of $25-$30 billion, due to approximately $123 billion in subscription demand. Meanwhile, Amazon also plans to launch its first euro bond issuance as early as Wednesday, aiming to raise €10 billion, bringing the total financing scale of the two issuances close to $50 billion.

Besides Amazon, nearly a dozen blue-chip companies such as Honeywell Aerospace, Toyota Financial Services, and Ford Motor Credit also concentrated their bond issuances on Tuesday. Analysts pointed out that this situation was driven by a brief stabilization of market sentiment following more than a week of Middle East conflict.

This concentrated issuance reflects the high uncertainty of corporate financing windows. Mark Clegg, Senior Fixed Income Trader at Allspring Global Investments, said, "The window to complete these transactions is becoming smaller and smaller. As soon as the market shows signs of stability, capital market participants must act immediately. The market has shifted from weekly planning to hourly planning."

Tech Giants’ AI Arms Race Drives Borrowing Surge

Amazon's bond issuance is the latest round of accelerated action by big tech companies to finance AI infrastructure.

Last November, Amazon completed its first US bond issuance in three years, raising $15 billion. Subsequently, competitors like Oracle issued $25 billion in bonds last month, and Alphabet raised over $30 billion through multi-currency issuances in US dollars, British pounds, and Swiss francs.

In February this year, Amazon disclosed an annual capital expenditure plan as high as $200 billion, surpassing competitors like Google and Microsoft, which shocked the market. Most of the funds will be allocated for AI and data center infrastructure construction.

CEO Andy Jassy said on last month's earnings conference call, "We will actively invest in this area… We want to invest to become the leader in this field." He also said the company is confident in its forecast for data center computing power demand and plans to ramp up investments in self-developed AI chips, robotics, and near-earth orbit satellites.

As for pricing, the longest-term bond in Amazon’s dollar issuance this time is a 50-year bond, with a final pricing at a spread of 130 basis points over US Treasuries, lower than the initial negotiation level of 155 basis points, demonstrating strong market demand and giving the issuer favorable bargaining power.

Nevertheless, the newly issued bonds still offer a considerable premium compared to Amazon's outstanding bonds in the secondary market, with some investors estimating an extra yield of more than 10 basis points—a rare occurrence in the current market environment.

Richard Cheng, head of Nuveen’s investment-grade corporate bond team, said, "We find this very attractive," noting that Amazon’s diversified retail revenue sources and its policy of not paying dividends enhance its credit quality.

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