Amazon and Alphabet borrow six billion francs in Switzerland. And that’s just a small part of a gigantic financing program that has only just begun.
May 16, 2026, 1:28 p.mMay 16, 2026, 1:28 p.m
Now the big American data center operators are fetching billions from the Swiss capital market and making the local pension funds happy. After Alphabet, Google’s parent company, made the second-largest transaction of all time in the Swiss franc market for corporate bonds with a 3 billion franc issue in February, Amazon is now following suit with an issue of the same amount.
Similar to Alphabet, Amazon also raises the money for six different terms between 3 and 25 years. The mega issues are structured in such a way that there is something for every pension fund, every insurance company, the Swiss National Bank and all other major investors. These so-called “institutional” investors are always looking for new investments when existing bonds have to be replaced by new investments at the end of their term.
The volume of outstanding Swiss franc bonds from foreign borrowers is currently around 150 billion francs and is spread across around 420 different bonds that are traded on the Swiss stock exchange. The average volume of a Swiss franc bond of almost 360 million francs gives an impression of the size of these current jumbo bonds from US tech companies.
$725 billion in investments
In the years after the financial crisis, the volume of foreign debtors in Swiss francs was still more than 300 billion francs. At that time, large foreign banks and financial institutions in particular were looking for cheap money in this country, remembers Adrian Knoblauch, head of bonds analysis at Zürcher Kantonalbank. This demand has declined sharply due to changes in global banking regulation.
The sudden comeback of the foreign segment on the Swiss franc market comes against the background that companies such as Amazon and Alphabet are currently investing huge amounts of money to expand their data centers and support the spread of AI-supported services in Internet search services or in mobile phone apps. According to agency reports, Amazon, Meta (formerly Facebook), Microsoft and Alphabet expect to invest $725 billion in the current year alone.
“Anyone who needs so much money would do well to diversify their creditor base,” explains long-time ZKB bond trader Benjamin Heck, explaining why the American hyperscalers – a generic term for the operators of large data centers – are currently discovering the local capital market and the Swiss currency. “If the US issuers were to only tap the domestic capital market with their immense financing needs, they would probably have to pay slightly higher interest rates there at some point, even though the American capital market is huge,” suspects the ZKB trader.
Amazon’s $3 billion issue in Switzerland is actually only a small part of the total $54 billion the company has raised worldwide since March. The global demand for such debt securities is obviously so great that Alphabet was even able to launch a 100-year pound bond during its own fundraising campaign in the UK in February. Companies that deal with ephemeral technologies typically cannot achieve such a feat. The last tech company to achieve this was cell phone manufacturer Motorola in 1997.
The Swiss capital market is larger than its reputation and therefore interesting for mega issuers from abroad. The pension funds alone manage over 1,200 billion francs – around a fifth of it in Swiss franc bonds. There are also various large insurance groups with investments of similar dimensions.
The Swiss creditors are happy about the issue offer from Amazon & Co. Amazon is offering 0.8275 percent per year for 3 years, 1.19 percent for 6 years, 1.4375 percent for 9 years, 1.6675 percent for 12 years and 2.05 percent for 24 years. The amount of interest coupons sounds attractive, at least from today’s perspective. A 10-year federal bond currently yields 0.46 percent and short-term investments yield 0 percent.
There is no threat of appreciation of the franc
Of course, Americans know that they are taking on significant exchange rate risk if they borrow in francs but need dollars. The 10-year US Treasury yield is 4.4 percent, which says almost everything about the inflation difference between the two unequal currency areas.
But exchange rate hedging currently costs less than it has in many years. There is still one question: Will the strong foreign demand for Swiss francs lead to an additional appreciation of the Swiss currency? “No,” says Adrian Knoblauch. “Large investors here already hold so many Swiss franc securities that they can simply redeploy them.” (aargauerzeitung.ch)