(Bloomberg) — Alphabet Inc. is poised to pay just under 7% to borrow longer-dated funds in its debut Australian dollar bond deal, in potentially its highest-ever coupon, underscoring how broader demands for cash among hyperscalers around the world are feeding into more costly funding almost everywhere.
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The US tech giant is poised to price a multi-part debt offering Wednesday, with the yield on the 20-year tranche, the longest part, indicated at about 6.95%, based on emailed guidance from Australia & New Zealand Banking Group, one of the banks leading the deal. Final pricing may differ.
The elevated borrowing costs for even Alphabet are more a reflection of the multi-decade high yields seen around the world this week than of the creditworthiness of Google’s parent company, which has S&P Global Ratings’ second-highest credit score. Rekindled inflation and a glut of fundraising by both governments and large tech firms, in general, is stoking concern about the capacity of investors to absorb the debt and pushing up the cost of doing so.
Still, the hundreds of billions of dollars being raised by Big Tech this year to finance their AI ambitions, is fanning concerns that such fundraising, possibly in its early innings, will siphon away demand from government debt, exacerbating fiscal concerns. Alphabet trails only Amazon.com Inc. so far in 2026 among large US corporates in tapping global debt markets across currencies.
Alphabet is seeking to raise as much as A$5.5 billion ($3.9 billion) in this week’s deal, according to ANZ. The deal has attracted investor demand in excess of A$20 billion, it said.
Corporate debt typically is priced over government debt or benchmarks heavily influenced by movements in rates, which means that companies generally end up paying more to borrow too when sovereigns do. Yields on 30-year US Treasuries rose to the highest since 2007 this week, while French and German borrowing costs also hit multi-year highs.
Alphabet is set to pay a spread of 180 basis points over the local benchmark for the 20-year part of its Australian deal, according to ANZ.
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