LONDON, Sept 9 (Reuters) - Amazon raised £4.25 billion ($5.76 billion) from its first-ever sterling bond sale on Wednesday,slightly more than initially expected, according to a bank managing the deal, ashyperscalers rush to diversify their funding sources tofinance the AI boom.
The dealis the latest example of how hyperscalers are increasingly selling bonds across markets outside of the U.S. this year, from euros to Swiss francs and the yen given their huge funding needs.
They have already issued more than $200 billion of debt this year, more than doubling from the whole of 2025, according to LSEG data.
Amazon saw final demand of more than £10.65 billion for the four-part deal, according to one of the lead managers.
This was slightly lower than around the £12 billion it saw before lead banks tightened pricing. Amazon will raise £1.25 billion from the three-year bond sale, and £1 billion each from six-, 12- and 19-year bonds, the lead manager said.
The bonds priced with yields ranging from around 5.2% on the 3-year, to 6.7% on the 19-year issue, according to the lead manager.
Sterling is the latest currency Amazon has added to its funding programme after tapping the euro, Swiss franc and Canadian dollar bond markets.
The European Central Bank warned earlier in September that hyperscalers' push into the euro zone bond market could potentially crowd out other borrowers and push up their financing costs.
Google-parent Alphabet, was the first hyperscaler to tap the sterling market in February, when it raised £5.5 billion from a five-part deal, including a rare 100-year bond.
Investor demand exceeded the amount Amazon was set to raise by about 2.5-times on Wednesday, much lower than the fivefold demand Alphabet saw in February, according to LSEG's IFR.
Gordon Shannon, partner at TwentyFour Asset Management, said the lower demand compared to the Alphabet sale reflected investor concerns around sustained borrowing by hyperscalers.
"It does show that demand is not unlimited," Shannon added.
The heavy pace of borrowing started to test the limits of investor demand over the summer and added to pressure on broader bond markets, where borrowing costs have risen sharply.
According toLSEG data, this is Amazon's first bond sale since July, which received weaker demand than in the past.
(Reporting by Yoruk Bahceli; Editing by Amanda Cooper and Dhara Ranasinghe)
