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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Amazon.com, Inc.    AMZN

AMAZON.COM, INC.

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Google owner Alphabet issues record $10 billion bond at lowest-ever price

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08/04/2020 | 10:13am EDT
FILE PHOTO: A 3D printed Google logo is seen in this illustration taken

(This Aug 3 story corrects second paragraph to say Alphabet coupon lowest at 5-year maturity going back to 1980 instead of since Apple deal in 2013)

By Kate Duguid

Alphabet Inc borrowed $10 billion in the investment-grade corporate debt market on Monday, the Google parent's largest ever bond issue, which it secured at its lowest-ever cost of financing.

Of the $10 billion on offer, the $1 billion five-year tranche was issued at a coupon of 0.45%, the lowest coupon seen on a U.S. corporate bond at that maturity, according to Refinitiv data, which goes back to 1980.

Investor appetite was fierce for the tech giant's six-part bond, as low interest rates and corporate bond buying from the Federal Reserve continues to support issuance. The deal garnered more than $31 billion in demand, according to Refinitiv IFR. Previously, Alphabet's lowest coupon was 1.25% on a $1 billion May 2014 note.

"We're at a stage where these extremely high-quality issuers - of which Alphabet is one - are going to price very very tight. That's because there are a lot of buyers who need short-term, don't-need-to-think-about-it money. You're getting two times the yield on the five-year Treasury," said Tom Graff, head of fixed income at Brown Advisory.

Last week Alphabet reported its first quarterly sales drop in its 16 years as a public company. Its share price was largely unmoved however, as the loss in sales was offset by a recovery in Google's ads business.

"There is a very narrow set of companies that were already super high quality, that are not impacted by this recession we're going through right now. And Google is one of them," said Graff.

Alphabet's five-year tranche priced just higher than Amazon.com's 0.40% three-year note issued in June, among the lowest corporate coupons ever recorded. Alphabet's 0.45% five-year tranche was however cheaper than Amazon's June 2020 offering at the same maturity, which priced at 0.80%.

Of the $10 billion offered, $4.5 billion from the seven-, 20- and 40-year tranches will be used for general corporate purposes, including acquisitions. The remaining $5.5 billion will be used for green initiatives, the company said, the largest-ever issue of corporate debt for environment, social and governance endeavors.

(Reporting by Kate Duguid in New York; Editing by David Gregorio)

Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET INC. 1.14% 1439.06 Delayed Quote.7.44%
AMAZON.COM, INC. 2.49% 3095.13 Delayed Quote.67.50%
APPLE INC. 3.75% 112.28 Delayed Quote.52.96%
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Financials (USD)
Sales 2020 369 B - -
Net income 2020 15 942 M - -
Net cash 2020 51 861 M - -
P/E ratio 2020 98,8x
Yield 2020 -
Capitalization 1 550 B 1 550 B -
EV / Sales 2020 4,07x
EV / Sales 2021 3,39x
Nbr of Employees 798 000
Free-Float 81,3%
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Technical analysis trends AMAZON.COM, INC.
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Income Statement Evolution
Consensus
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Mean consensus BUY
Number of Analysts 54
Average target price 3 672,84 $
Last Close Price 3 095,13 $
Spread / Highest target 35,7%
Spread / Average Target 18,7%
Spread / Lowest Target -18,4%
EPS Revisions
Managers
NameTitle
Jeffrey P. Bezos Chairman, President & Chief Executive Officer
Dave Clark Senior Vice President-Worldwide Operations
Brian T. Olsavsky Chief Financial Officer & Senior Vice President
Patricia Q. Stonesifer Independent Director
Thomas O. Ryder Independent Director
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