TLDR
- Alphabet is selling at least €3 billion ($3.5 billion) in euro-denominated bonds across six tranches
- The longest tranche matures in 2063, with initial price talk around 205 basis points above midswaps
- This follows Alphabet’s February raise of nearly $32 billion across dollar, sterling and Swiss franc markets
- Alphabet plans capital expenditures of up to $190 billion this year, focused on AI data centers
- The deal is being arranged by Barclays, BNP Paribas, Deutsche Bank and HSBC
Alphabet returned to the debt markets on Tuesday, launching a euro bond sale of at least €3 billion ($3.5 billion) spread across six tranches. GOOGL stock was down 0.93% on the day.
The offering comes just months after the Google parent raised nearly $32 billion in February across dollar, sterling and Swiss franc markets — its biggest-ever US dollar bond sale, which alone pulled in $20 billion.
That February deal attracted peak orders of $103 billion, well above the $15 billion initially targeted. It also included a rare 100-year bond — the first from a tech company since Motorola issued one during the dot-com era in the late 1990s.
Tuesday’s euro deal includes a note maturing in 2063 as its longest tranche, with initial price talk in the 205 basis points area above midswaps.
Proceeds will be used for general corporate purposes, which may include repaying existing debt.
AI Spending Drives the Borrowing
Last week, Alphabet said it plans capital expenditures of up to $190 billion this year, with data centers at the center of that investment.
Alphabet is not alone. Meta, Microsoft and Amazon are together expected to spend as much as $725 billion on AI data center equipment and related capital in 2025 — up from earlier projections.
Meta priced its own $25 billion bond deal on April 30, though conditions were tougher. Nearly all six tranches priced at higher risk premiums than Meta’s October sale, and peak orders were lower, pointing to some investor caution.
Around $300 billion in AI-related debt has already been sold across the sector, and bankers are noting signs of fatigue. Some recent hyperscaler deals have required higher compensation to attract buyers.
What the Market Is Saying
Ian Horn, portfolio manager at Muzinich & Co, said these companies are becoming a bigger part of the bond market, much like they did in equities.
“There are concerns about how the bond issuance will be absorbed,” Horn said, but added that investors are being compensated for it.
He noted it could be “a nice opportunity to add spread without really having to go to riskier names.”
Alphabet’s euro deal is being arranged by Barclays, BNP Paribas, Deutsche Bank and HSBC, and was expected to price later on Tuesday.
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