Summary
Amazon.com, Inc. (AMZN) has announced the execution of two new unsecured revolving credit agreements, replacing previously existing facilities. The first is a five-year revolving credit agreement for up to $15.0 billion, and the second is a 364-day revolving credit agreement for up to $5.0 billion. These new agreements, effective November 1, 2023, and facilitated by Citibank N.A. as administrative agent, enhance Amazon's liquidity and financial flexibility. These credit facilities are intended for general corporate purposes, including the potential backstopping of commercial paper issuances. Notably, both agreements do not contain financial covenants, which is a positive indicator for the company's financial health and operational independence. The replacement of older agreements suggests a strategic move by Amazon to secure favorable terms and potentially longer-term access to capital.
Key Highlights
- 1Amazon entered into a new five-year, $15.0 billion unsecured revolving credit facility.
- 2A new 364-day, $5.0 billion unsecured revolving credit facility was also established.
- 3These new agreements replace prior credit facilities totaling $10.0 billion (five-year) and $10.0 billion (364-day).
- 4The new credit facilities are unsecured and have a total borrowing capacity of $20.0 billion.
- 5Borrowings will be used for general corporate purposes, including backstopping commercial paper.
- 6The agreements feature interest rates based on a benchmark rate plus 0.45%, with a 0.03% commitment fee on undrawn portions.
- 7Importantly, neither the five-year nor the 364-day agreement contains financial covenants.