Walmart Inc., the world’s largest retailer, is raising at least $2.5 billion through a new US dollar bond offering and exploring its first Canadian-dollar debt sale as it seeks to diversify funding sources amid rising investment requirements.
The company launched a four-tranche US dollar bond offering on Monday, with maturities ranging from three to 10 years, Bloomberg reported, citing people familiar with the matter. The transaction attracted investor demand exceeding $14 billion at its peak.
Pricing for the longest-dated tranche tightened by about 0.3 percentage point from initial discussions to a spread of 0.45 percentage point over US Treasuries, according to the report.
Separately, Walmart has asked Bank of America Corp., Bank of Nova Scotia and Toronto-Dominion Bank to organise investor calls for a potential Canadian-dollar bond offering.
Walmart considers C$3.5 billion Canadian debt sale
Walmart is considering raising at least C$3.5 billion, equivalent to approximately $2.5 billion, through a Canadian-dollar offering. The proposed transaction could comprise four tranches with maturities ranging from four to 30 years.
However, the retailer has not made a final decision on the size of the Canadian-dollar transaction, Bloomberg reported.
The proposed offering would mark Walmart’s entry into the Canadian-dollar bond market, giving the company access to a broader pool of investors and another source of financing.
For US companies, issuing debt in Canadian dollars can help diversify funding channels and investor bases. Canadian investors, meanwhile, can use such offerings to expand their exposure to companies across different sectors and countries.
Borrowing supports expansion and technology investments
Walmart has increased investment in recent years as it expands its store network, strengthens its e-commerce operations and automates selected business processes.
According to analyst estimates compiled by Bloomberg, the retailer is expected to spend a record $29 billion next year. The company also has approximately $3.3 billion of bonds maturing in 2027, adding to its financing requirements.
The proposed debt offerings would provide additional access to capital as Walmart continues investing in its business and manages upcoming debt repayments.
The retailer, valued at approximately $940 billion in the report, typically issues bonds once a year. Its previous US dollar bond sale took place in April, when it raised $4.25 billion.
The latest US dollar transaction represents a second visit to the market this year, while the potential Canadian offering would introduce a new funding channel.
US companies broaden funding sources
Walmart’s potential Canadian-dollar offering follows similar moves by major US technology companies, including Alphabet Inc. and Amazon.com Inc., which accessed debt markets this year to finance their artificial intelligence infrastructure investments.
The trend highlights how large US corporations are exploring different debt markets to meet substantial capital requirements and broaden their sources of financing.
For Walmart, the borrowing plans come as the retailer balances expansion, technology spending and debt management.
Canadian bond pricing under discussion
The proposed Canadian-dollar transaction is also being assessed against existing debt in the domestic market.
According to people familiar with the discussions cited by Bloomberg, the shorter-dated Walmart bonds are being considered at spreads as much as four basis points wider than comparable bonds issued by Ontario utility Hydro One Ltd.
The longest-maturity tranche could price at a spread as much as seven basis points tighter than comparable Hydro One debt, the report said.
These pricing indications remain subject to change as discussions progress and market conditions evolve.
Walmart’s US dollar bond sale has already attracted substantial investor interest. Whether the company proceeds with its debut Canadian-dollar offering, and the final size and pricing of that transaction, remain to be determined.