Amazon has secured a $17.5 billion delayed draw term loan facility from Citibank and other banks.
Summary
- Amazon secured a $17.5 billion delayed draw term loan facility from Citibank and other banks.
- The company said the loan proceeds will support general corporate purposes, including investments and debt repayment.
- Bloomberg linked the financing to Amazon’s AI spending plans, including infrastructure costs and AI company investments.
The company disclosed the senior unsecured agreement in a June 10 filing with the Securities and Exchange Commission. The financing gives Amazon extra borrowing capacity for corporate needs, capital spending, and debt repayment.
Loan commitments run through Sept. 30
According to Amazon’s SEC filing, bank commitments under the facility expire on Sept. 30. Amazon can draw funds before that date, unless it borrows the full amount earlier. Any loan drawn under the facility will mature three years from the borrowing date. Citibank N.A. serves as the administrative agent for the agreement.
Amazon described the borrowing purpose in narrow terms. “Borrowing under the DDTL Facility will be used for general corporate purposes,” the company said. The filing did not assign proceeds to any single project. However, the structure lets Amazon access funds as business needs arise.
According to a report by Bloomberg, an Amazon spokesperson gave more details on those purposes. The spokesperson said proceeds may support investments, fund capital expenditures, and repay debt.
AI spending forms part of the funding backdrop
The new loan could help Amazon fund artificial intelligence investments. The report linked the facility to Amazon’s technology infrastructure plans.
Amazon has said it plans about $200 billion in AI infrastructure and other capital expenditures this year. Bloomberg cited that figure in its report as well as Amazon’s investments in AI companies. Amazon is expected to invest up to $50 billion in OpenAI.
The report said Amazon has already invested $10 billion in Anthropic. It also said another $15 billion investment in Anthropic may follow. Amazon also continues spending on cloud, data centers, and computing capacity. Amazon did not name any AI project in the SEC filing.
Debt sales add context to financing
Amazon sold 14 billion Canadian dollars of high-grade bonds on June 8. The sale equaled about $10 billion, according to the report. Since March, Amazon has sold bonds in euros, U.S. dollars, and Swiss francs, Bloomberg reported. The Canadian dollar sale came before the loan disclosure.
The company has not said the loan replaces any specific bond sale. It has also not disclosed any drawdown under the facility. The DDTL Credit Agreement includes customary representations, warranties, covenants, and default events, according to Amazon. The filing said it does not contain financial covenants.If a default event occurs, Amazon would have applicable grace periods.
If unresolved or unwaived, unpaid amounts may become immediately due. The filing said lenders may terminate commitments after an unresolved default event. Amazon named the firms as full-service financial institutions with multiple business lines. Their activities may include trading, commercial banking, investment banking, advisory, investment management, research, hedging, brokerage, and market making.
