The Google parent is testing Asian investor demand for its debt just days after a near-$500 billion market value wipeout tied to AI spending fears.
Alphabet is planning its first bond sales in Hong Kong and Singapore dollars, aiming to raise about $3 billion, Reuters reports, citing two people with knowledge of the matter.
One of the sources said the sales would likely raise at least $2.2 billion. Alphabet is considering minimum sizes of HK$8 billion ($1 billion) for the Hong Kong dollar portion and S$1.5 billion ($1.2 billion) for the Singapore dollar portion.
The deal could launch as early as Thursday, with bookbuilding and pricing during Asian trading hours. The bonds are expected to settle on 19 November. Final size, timing and pricing have not been set.
It will test Asian investor appetite following the AI-led selloff in global markets earlier this month.
Deal Structure
HSBC and JPMorgan have been mandated as joint global coordinators, according to a term sheet seen by Reuters. The bonds are expected to be rated Aa2 by Moody’s and AA+ by S&P.
The Hong Kong dollar bonds could carry two-, five- and 10-year maturities. The Singapore dollar bonds could add a 30-year tranche.
Bank of China (Hong Kong), ICBC (Asia) and Standard Chartered are also working on the Hong Kong dollar sale. DBS, OCBC and UOB are working on the Singapore dollar portion.
Alphabet’s Borrowing Keeps Climbing
The sale would add to Alphabet’s borrowing this year as it increases spending on data centres and other AI computing infrastructure, according to Reuters.
Alphabet said in a 29 October filing that it had issued $45 billion of US dollar notes and $35.8 billion of foreign currency notes in the nine months to the end of September.
Last week, the company raised €6 billion ($6.7 billion) in a euro bond sale. It also sold $25 billion of US dollar bonds and A$5.5 billion ($3.8 billion) of Australian dollar bonds in August.
Alphabet’s AI products include Gemini, the model that replaced the Bard chatbot in 2024.
Investors Already on Edge
Alphabet lost roughly $500 billion in market value on 29 October, a day after its third-quarter results. Fox Business reported that shares closed down 12.64%, the second-largest single-day market value loss in stock market history.
Third-quarter revenue of $127.6 billion fell short of Wall Street expectations, and Alphabet spent about $51.4 billion on capital expenditure in the quarter. Google Cloud revenue more than doubled to $30.7 billion, ahead of analyst forecasts.
Gizmodo reported that Alphabet posted negative free cash flow of $9.1 billion for the quarter, its second consecutive quarter in the red. The company still plans to spend $195 billion to $205 billion on capital expenditure this year.
Alphabet did not immediately respond to Reuters’ request for comment.
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Big Tech Turns to Debt
Alphabet is not alone. Reuters reports that Meta completed a $15 billion US bond sale last week, and Oracle sold $10 billion of bonds.
Bloomberg reported in July that Alphabet, Amazon, Meta, Microsoft and Oracle had added about $350 billion in debt over the past five years to fund AI data centres.
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