Google parent company Alphabet Inc. is capitalizing on robust investor appetite with its largest-ever euro-denominated bond sale, aiming to raise at least €9 billion and potentially up to €9.5 billion. The move has drawn over €25.2 billion in orders, signaling strong demand despite growing supply in the AI-debt market.
The offering is being structured across six tranches, with the longest-dated note maturing in 2063. Barclays, BNP Paribas, Deutsche Bank, and HSBC are arranging the deal, which is expected to be priced later on Tuesday. S&P Global Ratings has assigned an AA+ rating to the proposed bonds.
This euro issuance follows Alphabet’s February blockbuster, where it raised nearly $32 billion across dollar, sterling, and Swiss franc markets. That transaction was the company's biggest-ever US dollar bond sale, pulling in $20 billion and attracting peak orders exceeding $100 billion.
Proceeds from the latest offering are earmarked for general corporate purposes, primarily to finance Alphabet’s aggressive expansion in artificial intelligence. The company recently announced plans for capital expenditures of up to $190 billion this year, focusing heavily on AI data centers. This places Alphabet among a group of 'hyperscalers'—including Meta, Microsoft, and Amazon—that are collectively expected to spend as much as $725 billion on AI infrastructure in 2025.
However, market observers note emerging signs of investor fatigue. Approximately $300 billion in AI-related debt has already been issued, and recent deals from peers like Meta have priced at higher risk premiums with lower peak orders. Ian Horn, portfolio manager at Muzinich & Co, commented that while the debt issuance creates absorption concerns, the higher compensation offers "a nice opportunity to add spread without really having to go to riskier names.".
