Alphabet lines up 100-year sterling bond sale
Deal comes as Google parent steps up AI borrowing rush with $20bn sale of dollar bonds
Alphabet has lined up banks to sell a rare 100-year bond, stepping up a borrowing spree by Big Tech companies racing to fund their vast investments in AI this year.
The so-called century bond will form part of a debut sterling issuance this week by Google’s parent company, said people familiar with the matter.
Alphabet was also selling $20bn of dollar bonds on Monday and lining up a Swiss franc bond sale, the people said. The dollar portion of the deal was upsized from $15bn because of strong demand, they added.
Century bonds — long-term borrowing at its most extreme — are highly unusual, although a flurry was sold during the period of very low interest rates that followed the financial crisis, including by governments such as Austria and Argentina.
The University of Oxford, EDF and the Wellcome Trust — the most recent in 2018 — are the only issuers to have tapped the sterling century market. Such sales are even rarer in the tech sector, with most of the industry’s biggest groups issuing up to 40 years, although IBM sold a 100-year bond in 1996.
A banker familiar with Alphabet’s transaction said the company’s multi-currency bond offering is an effort to expand the investor pool given the massive amount of capital needed by Big Tech companies.
“There might be a supply-demand imbalance if you were to try to come back to the US dollar market over and over again,” the banker said.
Issuing a century bond in the sterling market is more cost-effective than in the dollar market, where the interest rate is higher, the banker added.
While a century bond is “highly unusual” for tech companies, it could appeal to buyers such as life insurance companies and pension funds, which have a mandate to buy long-term assets, said Nicholas Elfner, co-head of research at Breckinridge Capital Advisors.
Tony Trzcinka, a US-based senior portfolio manager at Impax Asset Management, which purchased Alphabet’s bonds last year, said he skipped Monday’s offering because of insufficient yields and concerns about overexposure to companies with complex financial obligations tied to AI investments.
“It wasn’t worth it to swap into new ones,” Trzcinka said. “We’ve been very conscious of our exposure to these hyperscalers and their capex budgets.”
Big Tech companies and their suppliers are expected to invest almost $700bn in AI infrastructure this year and are increasingly turning to the debt markets to finance the giant data centre build-out.
Alphabet in November sold $17.5bn of bonds in the US including a 50-year bond — the longest-dated dollar bond sold by a tech group last year — and raised €6.5bn on European markets.
Oracle last week raised $25bn from a bond sale that attracted more than $125bn of orders.
Alphabet, Amazon and Meta all increased their capital expenditure plans during their most recent earnings reports, prompting questions about whether they will be able to fund the unprecedented spending spree from their cash flows alone.
Last week, Google’s parent company reported annual sales that topped $400bn for the first time, beating investors’ expectations for revenues and profits in the most recent quarter. It said it planned to spend as much as $185bn on capex this year, roughly double last year’s total, to capitalise on booming demand for its Gemini AI assistant.
Alphabet’s long-term debt jumped to $46.5bn in 2025, up more than four times the previous year, though it held cash and equivalents of $126.8bn at the year-end.
Investor demand was the strongest on the shortest portion of Monday’s deal, with a three-year offering pricing at only 0.27 percentage points above US Treasuries, versus 0.6 percentage points during initial price discussions, said people familiar with the deal.
The longest portion of the offering, a 40-year bond, is expected to yield 0.95 percentage points over US Treasuries, down from 1.2 percentage points during initial talks, the people said.
Bank of America, Goldman Sachs and JPMorgan are the bookrunners on the bond sales across three currencies. All three declined to comment or did not immediately respond to requests for comment.
Alphabet did not immediately respond to a request for comment.