The senior unsecured delayed draw term loan facility, arranged through Citibank, matures three years after the funds are drawn
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Amazon $AMZN entered into a $17.5 billion term loan agreement on June 8, with Citibank N.A. serving as administrative agent, according to a filing with the Securities and Exchange Commission. The company said the funds would be used for general corporate purposes.
The facility is structured as a senior unsecured delayed draw term loan, meaning Amazon can draw on it as needed rather than taking the full amount at once. Commitments expire on Sept. 30, 2026, unless fully borrowed before that date, and any loans drawn carry a maturity date three years from the date of borrowing, the filing said.
Interest on the loans will be calculated at Amazon's option using either a floating base rate or a term SOFR rate, with an applicable margin ranging from 0.625% to 0.875% for SOFR-based loans, depending on the company's credit ratings, according to the filing. The agreement contains no financial covenants.
The loan comes as Amazon is executing one of the most aggressive capital spending programs in corporate history. The company disclosed alongside its fourth-quarter 2025 earnings that it planned to invest roughly $200 billion in capital expenditures in 2026, a figure that sent Amazon stock down as much as 10% in after-hours trading following that announcement. The bulk of that spending is tied to AI infrastructure, including data centers and custom chips.
Capital expenditures reached $44.2 billion in the first quarter of 2026, up from $25 billion in the same period a year earlier. Free cash flow on a trailing 12-month basis fell to $1.2 billion from $25.9 billion in the prior period, reflecting a year-over-year increase of $59.3 billion in property and equipment purchases.
Amazon CEO Andy Jassy has pushed back on investor concerns about the scale of the spending. "When you have shifts that are this momentous … you want to bet big," Jassy told CNBC in May. He drew a parallel to Amazon's early investment in Amazon Web Services, arguing that the pattern of heavy upfront capital spending eventually producing strong operating margins and free cash flow would repeat itself at a larger scale with AI. Amazon's AI business has reached an annualized revenue run rate above $15 billion, Jassy said.
The new loan facility adds to a broader trend of major tech companies turning to debt markets to finance AI infrastructure. Amazon, along with other large cloud providers, has become one of the largest borrowers in the U.S. investment-grade corporate bond market as AI-related capital spending has surged.
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