Should You Be Worried About Amazon's Recent $8 Billion Loan?
It would be easy to look right past this news item without giving it a second thought. Indeed, Amazon (NASDAQ: AMZN) didn't even issue a press release informing investors of the decision. It simply submitted the required SEC filing on the matter.
Nevertheless, the fact that the e-commerce giant is taking out an $8 billion short-term loan speaks volumes. Perhaps the company is feeling more financially pinched than it seems it should be. More than that though, this liquidity crunch may be an omen of a broader, sweeping economic headwind.
On the likely chance you didn't hear, Amazon just borrowed $8 billion. The annualized interest rate on the loan in question is the Secured Overnight Financing Rate -- around 4.3% right now -- plus 0.75%. All told, the loan -- earmarked for "general corporate purposes" -- will cost the company about $400 million over the course of the coming year.
Source Fool.com
