AI is taking an ever-larger place in corporate credit markets. After Oracle's $25bn issue last week, it's now Alphabet's turn to milk the market.
On Monday, Alphabet sold $20bn in bonds. The deal was a success, as Alphabet raised over the initially planned amount ($15bn), thanks to strong demand: for info, orders exceeding $100bn were recorded for the issue.
However, the company is not stopping there. It is also planning a first issue in sterling, which could include an exceptional 100-year bond, according to a Financial Times report citing sources close to the matter. A Swiss-franc deal is also on the cards.
So why is Alphabet raising capital in other currencies when demand for its latest dollar issue was very strong?
In the Financial Times, a banker familiar with the transaction said that the strategy is aimed at broadening the investor pool, as funding needs are very large. The banker also pointed to lower interest rates in the sterling market compared with the dollar.
When publishing their results, the hyperscalers - Alphabet, Amazon, Meta, Microsoft - all raised their 2026 capex forecasts: these four companies are expected to invest $660bn this year to beef up their AI infrastructure.
Cash flows will not be enough to finance everything, however, so debt will be needed. The aim, then, is not to saturate the market, which explains issuance in multiple currencies.
According to a Barclays note, issuance by US companies is expected to reach $2,460bn in 2026, up 11.8% y-o-y.
Last year, Alphabet already raised €6.5bn in European markets.
