Alphabet Taps Dollar, Euro Bond Markets for Jumbo Debt Offering, Bloomberg Reports

Alphabet kicked off an eight-part dollar bond sale, adding to a wave of offerings from technology companies as they invest aggressively in artificial intelligence, Bloomberg reported.

The Google parent is also seeking to raise €6.25 billion ($7.2 billion) in Europe’s debt market on Monday. Its sale comes just days after Meta Platforms Inc. issued $30 billion in what was the largest dollar-bond offering of the year.

Alphabet is marketing dollar-denominated notes, ranging from three to 50 years, according to a person familiar with the matter, who asked not to be identified discussing private matters. The longest portion of the offering, a 50-year security, may yield 1.35 percentage points above Treasuries, said the person.

Alphabet’s latest bond sale comes after it reported a surge in demand for cloud and AI services, with third-quarter sales rising to $87.5 billion. The company is investing record amounts to accelerate AI development, with capital expenditures expected to reach $91 billion to $93 billion this year. Alphabet is rated Aa2 by Moody’s, the third highest credit grade. It’s rated one notch higher by S&P.

Proceeds from the bond sales will be used for general corporate purposes, the person said. The spread on the three-year euro debt is 25 basis points over the reference rate, known as mid-swaps, they added. The 39-year part is being sold at 158 basis points above the benchmark.

Goldman Sachs, HSBC and JPMorgan Chase & Co. are among the banks managing the sale. Pricing is expected later today.