S&P Warns It May Downgrade Amazon

zerohedge.com / by Tyler Durden / Jun 16, 2017 3:13 PM

Unlike Apple, Amazon does not have a quarter trillion in (mostly offshore held) cash. Which means, it will issue debt to fund the Whole Foods purchase. Which means its leverage will rise above 1x. Which means S&P just warned of a downgrade of Amazon’s AA- rating.

From S&P:

Amazon.com Inc. Ratings Placed On CreditWatch Negative On Debt-Financed Acquisition Of Whole Foods

• Amazon has announced an agreement to purchase Whole Foods Market Inc. in  a debt-financed purchase of about $14 billion.
• We are placing our ‘AA-‘ corporate credit rating on Amazon on CreditWatch  with negative implications.
• Our preliminary view is that Amazon’s leverage will approach 1.5x, but  mostly likely remain below 2x. We see the purchase as a major strategic  initiative for Amazon, with execution risk, but also potential significant implications for Amazon’s market strategy as well as for the  broader U.S. grocery market.

S&P Global Ratings placed its  ratings, including the ‘AA-‘ corporate credit rating, on Amazon.com Inc. on  CreditWatch with negative implications.

 “The CreditWatch placement reflects our expectation that Amazon’s leverage  will increase as a result of its plan to purchase Whole Foods for about $14  billion,” said S&P Global Ratings credit analyst Robert Schulz.

READ MORE

The post S&P Warns It May Downgrade Amazon appeared first on Silver For The People.