Alphabet Makes History with 100-Year Sterling Bond Issuance
In a landmark financial move, Alphabet Inc., the parent company of Google, is selling a rare 100-year bond denominated in British pounds. This strategic issuance marks Alphabet's debut in the sterling bond market and positions the tech giant as the first technology company to attempt a century bond since IBM's pioneering effort back in 1996. The Financial Times reports that this century bond is a key component of Alphabet's ambitious multi-currency debt financing strategy, designed to support the company's massive capital requirements for artificial intelligence and cloud infrastructure expansion.
Massive Multi-Currency Debt Raise Details
Alongside the historic sterling bond, Alphabet is executing a substantial US dollar bond sale that has been significantly upsized due to overwhelming investor demand. Bloomberg reported that the dollar portion initially planned for $15 billion has been expanded to $20 billion after orders crossed an astonishing $100 billion threshold. The dollar bond offering comprises up to seven distinct tranches, with maturities ranging from short-term to long-term instruments.
The longest maturity in the dollar offering is a 40-year bond scheduled to mature in 2066, which is expected to price at approximately 0.95 percentage points above US Treasury rates. This represents a tighter spread than the initial guidance of 1.2 percentage points, indicating strong investor appetite. Demand proved particularly robust at the shorter end of the maturity spectrum, with a three-year tranche pricing at just 0.27 percentage points over Treasuries, reflecting exceptional market confidence in Alphabet's creditworthiness.
In addition to the sterling and dollar components, Alphabet is also preparing a Swiss franc bond sale, creating a comprehensive three-currency debt strategy that diversifies the company's funding sources across major global financial markets.
Strategic Rationale Behind Multi-Currency Borrowing
A banker closely involved with the transaction explained to the Financial Times that issuing debt across multiple currencies serves several strategic purposes for Alphabet. First, it helps diversify the company's investor base beyond traditional dollar markets, which is particularly important as Big Tech's capital requirements continue to expand dramatically. Relying exclusively on dollar markets could potentially create supply-demand imbalances that might affect pricing and availability of capital.
Second, sterling markets currently offer more favorable interest rate conditions compared to dollar bonds, making the century bond issuance more cost-effective for Alphabet. This financial efficiency is crucial as the company prepares for substantial capital expenditures. The borrowing initiative comes just days after Alphabet announced it could spend up to $185 billion on capital expenditures this year—approximately double last year's total—to fuel its ambitious AI projects centered around the Gemini platform and cloud infrastructure development.
Despite this aggressive borrowing strategy, Alphabet maintains a strong financial position. The company's long-term debt has already quadrupled to $46.5 billion in 2025, yet it still holds an impressive $126.8 billion in cash reserves, providing substantial financial flexibility and risk mitigation.
Big Tech Debt Markets Reach Unprecedented Levels
Alphabet's massive debt issuance is part of a broader trend in the technology sector. Oracle recently raised $25 billion through a bond sale that attracted a record $129 billion in orders, demonstrating similar investor enthusiasm for high-quality tech debt. According to Bloomberg analysis, Morgan Stanley expects hyperscale technology companies to borrow approximately $400 billion this year, a dramatic increase from the $165 billion borrowed in 2025.
This surge in tech borrowing could potentially push overall high-grade US corporate bond issuance to a record $2.25 trillion, reshaping corporate debt markets and investor portfolios. The increasing debt appetite among technology giants reflects their growing capital needs for AI development, cloud infrastructure, and competitive positioning in rapidly evolving digital markets.
Alphabet's comprehensive bond sales across all three currencies are being managed by a consortium of leading financial institutions including Bank of America, Goldman Sachs, and JPMorgan, highlighting the scale and complexity of this landmark financial transaction.
