Amazon's Warehouse Bonds Are Cracking -- And $4.7 Billion Is on the Line
Warning! GuruFocus has detected 4 Warning Sign with AMZN.
Both sets of bonds are now facing the same headwind: higher-for-longer interest rates. Affinius' debt, issued back in 2021, comes with a ticking clockprincipal needs to be repaid by October 2026, or interest rates jump sharply. And even if Affinius does pull off a refinancing, it'll be at much steeper rates than it locked in four years ago. That could significantly eat into cash flows generated from the Amazon lease payments, turning what once looked like rock-solid real estate income into something much more fragile.
Unlike traditional CMBS structures, these asset-backed deals include hard interest step-up clauses if deadlines are missed. That adds pressureand investors are watching closely. Fortress declined to comment. Affinius hasn't responded. But the pricing action suggests bondholders are no longer assuming a smooth glide path. If refinancing challenges continue, this could be a preview of broader stress in rate-sensitive corners of the real estate credit market.
This article first appeared on GuruFocus.
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