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I don't know how you can suggest issuing in EUR if you cannot compare the USD interest expense vs what you think they issue under EUR. I'm not trying to be rud

by whatok 9y ago

I don't know how you can suggest issuing in EUR if you cannot compare the USD interest expense vs what you think they issue under EUR. I'm not trying to be rude but I don't think you know what you are talking about if you are suggesting that executing a futures transaction that large won't move the market and that rolling USD 16bn equivalent futures is going to somehow come out near free. Amazon merely announcing an EUR deal that large is going to move the market and that's not even considering actually executing these theoretical trades. You don't want to give people the ability to frontrun you on something that large. Suggesting non-standard sized future contracts completely negates the liquidity argument and also leaves you at the mercy of either your counterparty or someone else who likely has the ability to move the market in order to screw you over. I'm pretty sure Amazon along with other issuers who issued multi-billion USD deals this year took a look at issuing in EUR and decided it wasn't in their best interests.

ringaroundthetx 9y ago
> I don't know how you can suggest issuing in EUR if you cannot compare the USD interest expense vs what you think they issue under EUR. Okay. > ... liquidity Liquidity begets liquidity. Do what you can. > I'm pretty sure Amazon along with other issuers who issued multi-billion USD deals this year took a look at issuing in EUR and decided it wasn't in their best interests. You shouldn't make that assumption. There are many market participants that wouldn't consider the world outside of their market. There was a long time where the US was the only liquid market, and still eclipses the single currency bloc for liquidity. When favorable inefficiencies come up it is easy to miss them. The cost of the transaction should be a factor, but the foreseeable costs are not that big of a factor. The company can issue 10 - 40 year bonds (or whatever else the market can bear) at low, zero, or negative interest rates and not have to worry about it until 10 - 40 years later. And then what? Well they just issue more bonds, in the next low interest rate environment and use a lot of the proceeds to pay off the remaining bit.

by whatok 9y ago

ringaroundthetx 9y ago

> I don't know how you can suggest issuing in EUR if you cannot compare the USD interest expense vs what you think they issue under EUR. Okay. > ... liquidity Liquidity begets liquidity. Do what you can. > I'm pretty sure Amazon along with other issuers who issued multi-billion USD deals this year took a look at issuing in EUR and decided it wasn't in their best interests. You shouldn't make that assumption. There are many market participants that wouldn't consider the world outside of their market. There was a long time where the US was the only liquid market, and still eclipses the single currency bloc for liquidity. When favorable inefficiencies come up it is easy to miss them. The cost of the transaction should be a factor, but the foreseeable costs are not that big of a factor. The company can issue 10 - 40 year bonds (or whatever else the market can bear) at low, zero, or negative interest rates and not have to worry about it until 10 - 40 years later. And then what? Well they just issue more bonds, in the next low interest rate environment and use a lot of the proceeds to pay off the remaining bit.