Asian Bond Sale Considered by Alphabet Amid AI Volatility
Alphabet Inc. has engaged in discussions regarding the potential issuance of its inaugural bonds denominated in Hong Kong and Singapore dollars, according to sources. This move would serve as a litmus test for investor appetite in Asia following a recent selloff in global markets related to AI. The parent company of Google has engaged in discussions with banks and investors regarding a potential debt sale as soon as this month, according to sources. The company is seeking to secure the equivalent of HKD 1 billion to HKD 1.5 billion and approximately SGD 1.5 billion, according to sources. Proceeds would be allocated for general corporate purposes, they added.
Discussions are ongoing, and the details may still be subject to change, according to sources. Global hyperscalers are expanding their search for debt financing into previously untapped markets as they pursue additional capital for AI initiatives. In August, Alphabet initiated the sale of its inaugural Australian dollar bonds, complementing its issuance of notes in Swiss francs, British pounds, Canadian dollars, and Japanese yen throughout the year. Investors are anxious about heightened scrutiny of AI projects following Democratic gains in the US midterms, leading to a potential sale. Credit spreads for tech issuers have widened, accelerating a repricing in the global debt market, where an AI-driven borrowing spree has increased yields.
Alphabet declined to comment on market speculation when asked. Alphabet and other tech giants like Microsoft, Amazon, and Meta are borrowing at unprecedented rates while investing billions in AI development. Last week, Alphabet secured €6 billion ($6.7 billion) in a multi-tranche euro bond sale, marking its second offering in this currency this year. The company faced significantly higher borrowing costs compared to its first euro deal in May amid rising concerns over AI spending pace.
