Walmart Inc. (WMT.US) plans to raise $6.5 billion through bond issuance: first foray into Canadian dollar bonds, financing diversification to support expansion spending

Walmart Inc. (WMT.US) plans to raise approximately $6.5 billion through the issuance of U.S. dollar and Canadian dollar bonds. The world's largest retailer is seeking to diversify its funding sources amid elevated expansion spending. Walmart Inc. has launched a C$5 billion (approximately $3.55 billion) Canadian dollar bond offering, marking its first-ever Canadian dollar bond issuance, according to people familiar with the matter. Another person familiar with the matter said the company has priced $3 billion in U.S. dollar bonds. Both people declined to be named as they were not authorized to speak publicly. Earlier, people familiar with the matter said Walmart Inc. hoped to raise at least $5 billion through the transactions. Analysts estimated based on market-compiled projections that Walmart Inc. has stepped up investment in recent years as part of plans to add new stores, expand e-commerce capabilities and automate certain tasks, with spending expected to reach a record $29 billion next year. In addition, Walmart Inc. has approximately $3.3 billion in bonds maturing next year. The U.S. dollar bond offering attracted more than $14 billion in investor demand at its peak, according to people familiar with the matter. Maturities range from 3 to 10 years, with the 10-year yield only 0.45 percentage points above U.S. Treasuries. Walmart Inc. typically issues bonds only once a year and already entered the U.S. market in April this year, when it raised $4.25 billion. Through this inaugural Canadian dollar bond issuance, the $950 billion-market-cap company has followed in the footsteps of U.S. tech giants Alphabet and Amazon.com, Inc. both of which issued Canadian dollar bonds earlier this year to fund artificial intelligence infrastructure investments. For U.S. borrowers, issuing Canadian dollar bonds can bring currency and investor base diversification; local investors, meanwhile, have snapped up bonds issued by foreign companies to broaden their exposure across sectors and issuers. Analysts Poonam Goya and Sydney Goodman said in a note to clients last week that as inflation and rising gasoline prices squeeze household budgets, Walmart Inc. will expand its customer reach and capture more household spending. On Monday, four companies including consumer goods manufacturer Kimberly-Clark Corporation collectively issued $10.4 billion in investment-grade U.S. dollar bonds. Banks involved in at least one of Walmart Inc.'s bond offerings include Bank of America Corp and BNP Paribas, which either declined to comment or did not respond to requests for comment.