Walmart Inc. is poised to raise at least US$6 billion from the sale of United States and Canadian dollar bonds as the world’s largest retailer seeks to diversify its funding sources amid a spending spree.
The company issued $5 billion (US$3.56 billion) of debt in its debut offering of Canadian notes, according to a person familiar with the matter. It has also priced US$3 billion issuance of U.S. dollar bonds , said a separate person, who also asked not to be identified as they’re not authorized to speak publicly.
Walmart was looking to raise at least $5 billion from the deals, people previously said.
The retailer has boosted investments over the past few years as part of a plan to add new stores, expand its e-commerce capabilities and automate some tasks, with spending seen at a record US$29 billion next year, according to analyst estimates compiled by Bloomberg. Walmart also has about US$3.3 billion of bonds maturing next year .
The firm is set to broaden its customer reach and capture more household spending as inflation and higher gas prices squeeze budgets, Bloomberg Intelligence analysts Poonam Goya and Sydney Goodman said in Oct. 15 report
The U.S. dollar sale attracted more than US$14 billion of investor demand at its peak, the people said. Maturities range from three to 10 years, with the latter set to yield just 0.45 percentage point above Treasuries. Walmart, which typically sells bonds just once a year, last tapped the U.S. market in April. It raised US$4.25 billion then.
With the debut Canadian-dollar debt offering, the US$940 billion company is following in the footsteps of U.S. technology giants Alphabet Inc. and Amazon.com, which tapped the market this year to fund their artificial intelligence infrastructure investments.
Selling Canadian bonds offers currency and investor diversification for U.S. borrowers, while local investors have snapped up debt sold by foreign firms to broaden their exposure across sectors and issuers.
The company is set to broaden its costumer reach and capture more household spending as inflation and higher gas prices squeeze budgets, Bloomberg Intelligence analysts Poonam Goya and Sydney Goodman said last week in a note to clients.
Walmart, Bank of America Corp. and BNP Paribas SA, among the banks working on at least one of the two bond sales, either declined to comment or didn’t respond to a comment request.
—With assistance from Caleb Mutua.