Amazon on Tuesday reported it agreed to an $8 billion term loan with lenders, according to a Securities and Exchange Commission filing.
The loan is set to mature in 364 days, with the possibility to be extended for an additional 364 days — at which point the interest rate spread would increase. Toronto Dominion acted as the loan agreement administrative agent, with the list of lenders including Mizuho Bank and National Westminster Bank.
“Like all companies we regularly evaluate our operating plan and make financing decisions – like entering into term loan agreements or issuing bonds – accordingly,” an Amazon spokesperson told Retail Dive via email. “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.”
The e-commerce giant warned in October that profits could disappear in its fourth quarter. Its Q3 earnings report showed that revenue from services grew more year over year than revenue from retail online and in-store. For the quarter, operating income decreased 48% from $4.9 billion to $2.5 billion while net income fell 9%.
After hiring rapidly over the past few years, Amazon enacted layoffs in November, with plans to cut about 10,000 jobs, according to The New York Times. CEO Andy Jassy later said more layoffs would come in 2023 as part of its annual operational review, which he noted was “more difficult due to the fact that the economy remains in a challenging spot and we’ve hired rapidly the last several years.”
Meanwhile, the European Union announced rules in December intended to make Amazon’s e-commerce marketplace a more even playing field. The rules included restricting the use of seller’s data and improving seller access to the “buy box,” all of which E.U. Executive Vice President and Commissioner for Competition Margrethe Vestager says will end the company’s preferential treatment of its own retail operations by the summer.
