Google Parent Alphabet Taps Debt Market for $32 Billion to Fuel AI Spending, Including Rare 100-Year Note

Alphabet reportedly raised close to $32 billion through bond issues in dollar, sterling and Swiss franc markets within a day, as per Reuters. The company first sold $20 billion in a 7-part dollar offering, with maturities ranging from 2029 to 2066. 

The following day, it issued bonds in the UK and Switzerland, making those some of the largest corporate deals in those markets. 

Century Bond In Sterling Tranche 

The sterling offering totalled £5.5 billion across five tranches. It included a £1 billion 100-year bond carrying a 6.125% coupon and about a 6.05% yield.  

Demand for the century bond was reported to be nearly 10 times the amount on offer. Such long-dated corporate bonds are uncommon, particularly from technology companies. 

First Tech Century Bond Since 1997 

According to market data, this was the first century bond issued by a technology company since Motorola’s deal in 1997. Issuance of 100-year bonds increased after the 2008 financial crisis, when borrowing costs were low, but slowed after interest rates began rising in 2022. 

The Alphabet bonds were also issued without restrictive covenants, which are often included to protect investors. 

Swiss Franc Offering and Investor Base 

Alphabet also raised 3.055 billion Swiss francs through a five-part bond sale with maturities between three and 25 years. Ultra-long bonds are typically bought by pension funds, life insurers and endowments, which have long-term liabilities and look for extended-duration assets. 

AI Spending Behind the Borrowing 

The fund-raising comes as large technology companies increase spending on artificial intelligence infrastructure. Combined capital expenditure by Alphabet, Microsoft, Amazon and Meta is expected to reach at least $630 billion this year, mostly for data centres and AI chips.  

Technology firms issued about $121 billion in US corporate bonds last year as these investments gathered pace. 

Read More: The Whole Truth Raises $51 Million in Series D Round to Push Profitability and IPO Readiness! 

Conclusion 

The multi-currency bond sale, including the century-long tranche, shows how large technology firms are turning to debt markets to fund longer-term AI infrastructure. 

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