Amazon announced a seven-part jumbo investment grade bond issue to help finance its US$13.7bn acquisition of Whole Foods.
The deal, rated Baa1/AA-, is expected to be US$14bn and to price on Tuesday. It is also expected to include tenors going out as long as 40 years.
Whisper talk on the deal is 55bp area over Treasuries for the 3 year, T+75bp area for the 5.5 year, T+95bp-100bp for the seven-year, T+110bp for the 10-year, T+120bp-125bp for the 20-year, T+140bp-145bp for the 30-year and T+160bp-165bp for the 40-year.
Investors are offered some protection in this transaction by a special mandatory redemption at 101 if the merger does not occur prior to February 15, 2018 - but only on the three-year, 5.5 year, seven-year and 10-year tranches. The SMR is subject to a one-time extension of 90 days under certain circumstances.
Bank of America Merrill Lynch, Goldman Sachs and JPMorgan are running the deal.