Amazon poised for bond issue Amazon was set to issue a bond for the first time in more than a decade on Monday, taking advantage of rock-bottom borrowing costs as it continues an investment drive that is withering its profits. The world's largest online retailer by sales was seeking to issue at least $500m in debt, according to a regulatory filing. But bankers familiar with the sale said the offering might exceed $2bn. The bond received a Baa1 investment grade rating from Moody's, which cited Amazon's "good liquidity and strong balance sheet." But the company's low profits weighed on the decision after it reported an operating loss in the past quarter. "What brought the rating down is that Amazon's profitability is at its lowest since 2006 or 2007," said Maggie Taylor, senior credit officer at Moody's. They're in an investment period, but we're concerned that they might not be able to bring [profitability] back to historic levels. The bond was set to price later on Monday and was being sold by Goldman Sachs and Morgan Stanley. Amazon is spending on investments in its Kindle tablet computers, new warehouses, new data centres and a new headquarters in its hometown Seattle as it expands in an array of businesses from high fashion to cloud computing. Its investments contributed to an operating loss of $28m in the three months to the end of September, but its vanishing profits have not reduced the enthusiasm of many equity investors. Amazon has limited debt and $5bn in cash on its balance sheet. The bond would boost that figure, which is relatively small compared with Apple or Microsoft, said Colin Gillis, analyst at BGC Partners. "What it really does is increase their ability to do an acquisition if they so choose," he said. Potential targets have been rumoured to include Research In Motion and Texas Instruments" chip business. Amazon last sold dollar-denominated bonds in 2000, in a $681m offer of 10-year convertible notes at 6.875 per cent, according to data provider Dealogic. Adrian Miller, global markets strategist at GMP Securities, said: "This is a large corporation with a well-recognised name and no debt. The underwriters will have no trouble selling these bonds . . . As for the company, why not sell debt now that yields are so low and demand so strong? Corporate bond yields have declined sharply this year as companies take advantage of strong investor appetite to sell a record amount of debt. Average yields for investment-grade bonds denominated in dollars touched an all-time low at 2.66 per cent in October, down from 3.8 per cent at the beginning of 2012, according to Barclays indices. Yields rebounded to 2.74 per cent on Monday.