Amazon To Fund Part Of Whole Foods Buy With Debt Offering

Amazon

Amazon.com announced Tuesday (Aug. 15) the launch of a private debt offering.

In a press release, the company said it is offering to sell senior unsecured notes in a private offering, with net proceeds going to fund some or all of its multibillion-dollar acquisition of Whole Foods Market. Proceeds will also go for general corporate purposes, the eCommerce giant said.

Amazon later announced that it would price the offering of $16.0 billion, as predicted by analysts by CNBC. Moody’s earlier in the week assigned a Baa1 rating to what it said according to CNBC is a proposed offering of up to $16 billion in senior unsecured notes. “The change in outlook to positive reflects our view that despite the increase in debt, the Whole Foods acquisition is an immediate credit positive for the company on a variety of fronts,” Moody’s Vice President Charlie O’Shea said in a statement, according to CNBC. Analysts told CNBC the offering will be broken down into seven parts, with three-year to 40-year maturities.

Amazon is moving forward with its acquisition of Whole Foods, but that doesn’t mean all lawmakers are on board. In July, Bloomberg reported that U.S. Rep. David Cicilline, a Democrat from Rhode Island, sent a letter to the House Judiciary Committee calling for a hearing on the acquisition, arguing that a monopoly has hurt wages for workers and created “gross inequality in the workplace.” Amazon’s proposed acquisition of Whole Foods supermarket “raises important questions concerning competition policy, such as how the transaction will affect the future of retail grocery stores, whether platform dominance impedes innovation and if the antitrust laws are working effectively to ensure economic opportunity, choice and low prices for American families,” Cicilline wrote, according to Bloomberg. The call on the part of the lawmaker comes as Doug Kass, a hedge fund manager, has shorted shares of Amazon, saying antitrust concerns will hurt its stock price. “My understanding is that certain Democrats in the Senate have instituted the very recent and preliminary investigation of Amazon’s possible adverse impact on competition,” he wrote in a recent blog post.