Amazon.com Inc (NASDAQ:AMZN) said it has entered into a credit agreement with a number of lenders for an unsecured US$8bn term loan.
The loan will mature in 364 days but may be extended for an additional 364 days, the eCommerce giant revealed in a filing with the US Securities and Exchange Commission (SEC).
The initial interest rate on the loan is the Secured Overnight Financing Rate (SOFR) plus 0.75%. If the option to extend the loan’s maturity is exercised, the interest rate spread will increase from 0.75% to 1.05%.
The proceeds will be used for general corporate purposes, Amazon said.
"Given the uncertain macroeconomic environment, over the last few months we have used different financing options to support capital expenditures, debt repayments, acquisitions, and working capital needs," an Amazon spokesperson told Reuters.
The challenging economic climate is expected to impact growth at the company as soaring inflation puts the brakes on spending by businesses and consumers.
Amazon has flagged workforce reductions in early 2023. A source told Reuters in November that the company was targeting about 10,000 job cuts.
The company's shares dropped by around 50% in 2022.
Amazon had about US$35bn in cash and cash equivalents and long-term debt of around US$59bn at the end of September 2022.
Toronto Dominion was the administrative agent for the loan agreement in which DBS Bank and Mizuho Bank were among the lenders, Amazon said.