Clearly more companies are using debt and using more of it. US corporate debt market is now around $8 Trillion dollars outstanding [1] and new debt issuance in 1Q 2017 was up 70% [2], and even this article mentions multiple examples of recent "mega bond deals" by other companies [3].

I'm not sure how Eurozone debt came up. I didn't read anything about Amazon and Eurozone issuance in the article, did I miss it? Though, technically Amazon did issue an unregistered private placement of debt in this case, so the debt was not eligible to be sold in the US or sold to US persons unless exempt of course [4].

As for the claim that investment grade corporate issues can get 0% in the EU or that junk bonds have lower yields than treasuries, or any sort of ideas like that where it is "cheaper" to borrow in Europe because spot rates are printing lower (and negative) there - that's a miscalculation and debt markets doesn't work like that. First, at a basic theoretical level there is a concept of interest rate parity which is maybe worth reading about but not really super important after freshman year of college [5].

I could not find a public non-paywall link with current EURUSD basis swap rates (basis swaps would help show the adjusted rates foreign borrowers pay) but the following links from the ECB show how much they are sucking right now suffering from low GDP and low inflation (remember debt that one borrows is paid back with future money that has inflated (and sometimes deflated) so if inflation is relatively high between the time money is borrowed and paid back that is good for the borrower) [6] [7]. According to this link option adjusted spreads on EU high yield are around 275 basis points not lower than treasuries, that is +275, as of right now [8].

While off the subject for a sec, it appears currency FX risk hedging also came up in this thread, with some people talking about hedging currency FX on a company's non-USD denominated debt being a good thing and/or inexpensive and/or easy for a company to do. IMHO that is a misleading interpretation of what corporate currency FX hedging is. A company "hedging" a financial risk like a currency depreciation going against them does not elimate risk nor lock in some sweet profits like people seem to think hedging accomplishes. What happens is future currency moves can lead to uncertain GAINS OR LOSSES for a company, but nobody knows which way it will go. So company management can choose to reduce their potential gains and potential losses from currency FX in the NEAR future in exchange for taking a certain definite loss right now. A company can only do this for the near future, 3-24 months or so, on a rolling basis if they choose. (Amazon issued for 40 year bonds, there is no such thing as 40 year currency hedging forwards, nothing is locked over this time, a lot can happen).

It's important to note a company will have paid money to eliminate downside and eliminate upside. The company has also added a new risk, the risk from the hedge project itself, as currency hedging doesn't always work as expected. Investment banks make mistakes (Citi and UBS are notably error prone, GS may or may not screw up on purpose) or central banks and gov regulators do weird things a FX hedge didn't factor in when started (Za Sviss). The list goes on.

I'm not anti corporate FX hedging, I see companies using currency hedging in the right way and to their advantage every day. I just was hoping to clarify that hedging is not an elimination of risk for a small cost. It's the reduction of potential profit and loss in exchange for a certain loss, this loss can be expensive and the process can go wrong making things worse.

Q: Is a certain relatively small cost every month better for a company than an uncertain gain or uncertain loss every month?

I would say sometimes. Depends on the company and the context.

One thing we do know is Amazon has foreign currency risk and Amazon has chosen NOT to hedge it or at least not hedge a huge chunk of it. Their latest SEC filing reports a loss of at least -$450 million due to foreign currency changes going against them.

Ok, sorry for the long post, bathroom break over, I just want to add one thing: companies cannot just borrow as much as they want for no reason just because rates are low. Many companies with low or no debt are not borrowing because they have no f'ing clue what to do with the money if they did take on debt. Companies need to do something with borrowed money AND they need to tell lenders more or less what that something is. (Amazon said clearly in their filing they want to borrow this money to buy a chain of overpriced health food stores, Apple has tons of cash saved up but Apple has made clear they are issuing debt anyway so Carl Icahn will shut up).

If a company can't think up a worthwhile making or selling of something new to invest their capital into (a problem many companies today are suffering from) company existing debt doesn't have to just sit in the bank earning nothing. The company can pay back loans early, or this money can be re-invested into other bonds! Yes, Debt on debt. Though these bonds a company's corporate cash invests in are going to be better-rated more-boring bonds lower yielding than their own (often just treasuries and short term other quasi's). Thus this limited corporate cash investing universe all but eliminates a scheme where it would be worthwhile for a company to borrow cheap debt and then try to earn a spread by reinvesting that $ into risky securities or bitcoins or sports bets or R&D into flying cars etc.

[1] https://fred.stlouisfed.org/search?st=corporate+debt

[2] https://www.sifma.org/resources/archive/research/

[3] https://www.bloomberg.com/news/articles/2017-08-15/amazon-is...

[4] https://www.sec.gov/Archives/edgar/data/1018724/000119312517...

[5] https://en.wikipedia.org/wiki/Interest_rate_parity

[6] https://www.ecb.europa.eu/stats/financial_markets_and_intere...

[7] https://www.ecb.europa.eu/stats/html/index.en.html

[8] https://fred.stlouisfed.org/series/BAMLHE00EHYIOAS