Alphabet (GOOGL.US) raised AUD 3.9 billion in its first bond issuance, adding to the wave of financing among global technology companies.

According to a list of terms seen by foreign media, American tech giant Alphabet (GOOGL.US) successfully raised 5.5 billion Australian dollars (approximately 3.89 billion US dollars) through its inaugural Australian dollar bond issuance, adding to the global wave of intensive financing by tech companies. The terms sheet shows that the issuance includes four segments: 3-year, 5-year, 10-year, and 20-year bonds, with the longest duration 20-year bonds having a coupon rate set at 6.9%. As of press time, Alphabet has not responded to requests for comment. This marks Alphabet Inc.'s first entry into the Australian dollar bond market, with long-term bond financing costs approaching 7%, potentially setting a record for the highest coupon rate in the company's history. According to an email guidance from one of the lead underwriters, Australia and New Zealand Banking Group (ANZ), Alphabet will price a multi-term Australian dollar bond on Wednesday (August 19), with indicative yields for the 20-year bonds at around 6.95%, being the longest maturity segment in this issuance, though final pricing may vary. This bond issuance follows Alphabet's completion of a 25 billion US dollar bond offering earlier this month. Global tech companies are increasingly turning to capital markets to raise funds for their massive investments in AI, whereas they have typically relied on their own cash reserves for investments. It is projected that these companies' expenditures in the AI sector will exceed 730 billion US dollars this year, with significant capital expenditures putting pressure on cash flow. Morgan Stanley estimates that by 2026, global AI-related debt issuance could approach 570 billion US dollars, more than doubling from last year. In just the first quarter of this year, the five largest supercomputing companies have already issued 115 billion US dollars in bonds, while the total for the entire year of 2025 is about 70 billion US dollars. In Alphabet's second-quarter earnings report released at the end of July, the company recorded its first-ever negative free cash flow. Capital expenditures surged to 44.9 billion US dollars, while free cash flow dropped to -5.855 billion US dollars. Just in the first quarter, the company had positive free cash flow of 10.1 billion US dollars.