Quarterly losses force Amazon into $6bn bond sale

Amazon has sold its biggest bond offerings for funds of up to $6 billion (£3.83 billion) as it looks to invest heavily in drones, television and smartphones.

The retailer has issued the bonds in five parts, according to Bloomberg. The sale is double that of it’s last offering, when Amazon issued $3 billion (£1.91 billion) bonds in 2012.

Amazon chief Jeff Bezos has emphasised previously that the company relies on spending big and relying on sales growth. The Seattle-based company reported its largest ever quarterly loss in October, so will be looking for a quick injection of funds.

Recent upsets have knocked the company somewhat. With the Amazon Fire Phone flagging in sales the retailer admitted that it made a mistake charging as much as it did for the handset. The company admitted in October to still having £52 million worth of phones unsold.

As part of bond sales the company has offered $1.25 billion (£800 million) parts of 3.8 per cent, 10-year notes and 4.8 per cent 20-year securities. It also sold equal $1 billion (£640 million) pieces of 2.6 per cent, five-year debentures and 3.3 per cent seven-year obligations.

Bezos’ gung-ho attitude to growing Amazon’s brand has not gone down well with some. Chief Financial Officer Thomas Szkutak told Bloomberg that the company needed “to be cautious” with its investments in the future.

“Amazon’s weak margins are driven in part by the company’s strategy to increase its scale and also re-invest in growth opportunities,” Jordan Chalfin, senior tech analyst at CreditSights, told the International Financing Review.

“[But] Amazon’s long-term vision and strategy, and the inherent staying power of the business, outweigh [its] current level of profitability.”

Amazon’s shares have fallen by 2.5 per cent to £210.5 following its posted losses.