Spending on artificial intelligence (AI) investments has triggered a wave of borrowing among major U.S. tech giants. According to a memo sent by lead underwriting banks, Google’s parent company Alphabet on the 10th issued a rare 100-year bond, as part of a global fundraising plan involving $31.51 billion (approximately RM123.61 billion) in bonds.
After completing a $20 billion, seven-tranche U.S. dollar bond issuance on the 9th, Alphabet subsequently launched pound sterling and Swiss franc bonds.
According to data from the London Stock Exchange Group (LSEG), this 100-year bond issuance by Alphabet is the first such case in the tech industry since Motorola in 1997.
Based on final terms obtained by the media, the total amount of the pound sterling bonds issued by Alphabet this time reached £5.5 billion (approximately RM29.49 billion) over five tranches, with the 100-year bond making up £1 billion and carrying a coupon rate of 6.125%.
According to International Financing Review (IFR) data, demand for the 100-year bond was nearly ten times the original issue size, and the bond’s yield was 6.05%.
In addition, Alphabet also raised 3.055 billion Swiss francs (approximately RM15.63 billion) through another underwriter, also in five tranches, with maturities ranging from as short as three years to as long as twenty-five years.
Issuing 100-year bonds is rare in the market. During the long-term low interest rate period after the 2008 global financial crisis, there was a surge in 100-year bond issuances, but since 2022, as central banks around the world raised rates sharply post-pandemic, the issuance of such bonds has since cooled.