Amazon.com has entered a $17.5 billion delayed draw term loan credit facility agreement, with Citibank N.A. serving as administrative agent on the deal.
The agreement was signed on June 8 and disclosed in a filing with the Securities and Exchange Commission, with Amazon stating the funds are intended for general corporate purposes.
Lenders participating in the facility alongside Citibank include BofA Securities, JPMorgan Chase, HSBC, and Wells Fargo, according to the SEC filing.
The facility is structured as a senior unsecured delayed draw term loan, allowing Amazon to access funds as needed rather than taking the full amount immediately.
Commitments under the facility expire on September 30, 2026, unless fully drawn before that date, with any borrowed amounts carrying a three-year maturity from the date of each draw.
Interest will be calculated at Amazon’s option using either a floating base rate or a term SOFR rate, with applicable margins ranging from 0.625% to 0.875% depending on the company’s credit ratings.
Amazon may prepay loans or reduce unused commitments at any time without penalty, aside from customary breakage costs, giving the company significant operational flexibility.
The loan adds to an already striking borrowing surge, as Amazon also filed earlier this week for a five-part debt offering in Canada worth up to C$14 billion.
Capital expenditures for the first quarter of 2026 reached $44.2 billion, up sharply from $25 billion in the same quarter the prior year, reflecting the enormous scale of Amazon’s AI infrastructure ambitions.
Trailing 12-month free cash flow has fallen dramatically to $1.2 billion from $25.9 billion in the earlier period, driven by a $59.3 billion year-over-year increase in property and equipment purchases.
Amazon has outlined plans for $200 billion in capital expenditure this year as it races to service a reported $364 billion cloud backlog across its AWS business.
Credit rating agency S&P has warned that Amazon’s “leverage will increase substantially” and that the company will likely report negative free operating cash flow over the next two years.
Amazon CEO Andy Jassy has defended the spending strategy aggressively, pushing back against investor concerns about the scale and pace of capital deployment.
“When you have shifts that are this momentous … you want to bet big,” Jassy told CNBC in May, drawing parallels to Amazon’s early bets on Amazon Web Services.
Jassy has argued that substantial upfront capital investment in AI will ultimately generate strong operating margins and free cash flow, mirroring the trajectory of AWS over time.
Amazon is far from alone in its AI-driven debt appetite, as Big Tech peers including Alphabet and Meta have also signaled that spending will not slow down anytime soon.
Combined AI capital outlays across major technology companies are now projected to surpass $700 billion this year, up from approximately $600 billion previously estimated.
Meta filed for its largest bond offering ever at up to $30 billion in October, while Alphabet disclosed plans to sell Japanese yen-denominated bonds for the first time last month.
Morgan Stanley projects AI-related debt issuance will surge to $570 billion in 2026, fueled by infrastructure investments from Amazon, Google, Meta, OpenAI, and Anthropic.
The broader trend marks a significant shift in how technology giants fund expansion, moving away from relying primarily on internal cash reserves toward tapping public and private debt markets aggressively.
