Alphabet Sells Biggest Yen Bond on Record by Foreign Issuer

Alphabet Inc. sold ¥576.5 billion ($3.6 billion) of bonds in the biggest ever yen deal by a non-Japanese company as competition to fund centers and AI infrastructure intensifies.

The debut yen bond by the parent of Google includes ¥200.5 billion of five-year bonds at 50 basis points over mid-swaps, according to people familiar with the matter. There were six other tranches.

The latest bond sale is part of a series of bond sales that raise close to $60 billion for the internet giant, a four-month run that ranks as one of the greatest corporate borrowing binges ever. It’s another sign that large global corporates are increasingly looking at the yen bond market as AI-driven capital spending accelerates. Yen bond sales by non-Japanese issuers have risen over 280% to ¥1.6 trillion this year, according to data compiled by Bloomberg.

“While US investors are showing signs of fatigue, Japanese investors remain yield-hungry and are willing to snap up paper from big-name issuers such as Alphabet,” said Taketoshi Tsuchiya, president of Fujiwara Capital Co.

Hyperscalers have been issuing a large amount of dollar debt to fund data capital-intensive centers, and investors are likely already tapped out, he said.

The deal also underscores investor demand for the extra yield that’s available on corporate notes, especially as Japanese government bonds have seen unprecedented volatility due to the Bank of Japan’s withdrawal from decades of ultra-easy policy.

The 10-year part of Alphabet’s deal has a coupon of 3.189%, which compares with 2.67% on the benchmark sovereign bond of that tenor.

Alphabet’s bumper bond may also embolden other global companies to tap the yen market. Berkshire Hathaway has been a regular issuer since its first yen bond sale in 2019, and last came to the market in April.

The fund-raising may also fuel expectations that Alphabet could deepen its presence in Japan. Alphabet recently raised its capital expenditure outlook to as much as $190 billion, up from a prior estimate of $185 billion and roughly double its 2025 spending.