Alphabet, Google’s parent company, has quietly returned to the debt markets with an unusually long bet on low borrowing costs: a 100‑year sterling bond issue of just £1 billion, which attracted nearly ten times that amount in orders. The issuance is part of a broader multi‑currency funding programme that included a separate, upsized US dollar deal of $20 billion earlier in the week and signals an intensifying financing push by major cloud and AI players.
The sterling “century bond” is notable for its rarity — the last comparable 100‑year corporate bond from a technology company was issued by Motorola in 1997 — and for its modest size relative to the demand it received. Investors showed concentrated appetite across maturities in Alphabet’s dollar sale too, prompting the company to increase the planned $15 billion deal to $20 billion after total orders topped $100 billion.
Alphabet’s decision to borrow across multiple currencies reflects both a tactical search for lower yields and a strategic effort to broaden its investor base. Sterling market rates are currently lower than their dollar counterparts, making a long‑dated pound issue relatively attractive from a financing‑cost perspective, while sales in Switzerland and other markets are also being contemplated to avoid overconcentration in the US market.
Market pricing illustrates why issuers are willing to reach out. Long maturities in the dollar book — including a 40‑year tranche maturing in 2066 — were expected to trade at roughly 120 basis points over US Treasuries but ultimately tightened to around 95 basis points. Shorter paper proved most popular: the three‑year tranche priced at only around 27 basis points over comparable Treasuries, underscoring robust demand for high‑quality, short‑dated corporate credit.
The financing push is directly tied to an intensifying capital‑expenditure cycle. Alphabet disclosed plans this year to spend about $185 billion on AI models and cloud infrastructure, nearly double last year’s investment, and its long‑term debt position rose to roughly $46.5 billion in 2025 even as the company retained more than $125 billion in cash. Other tech firms are following suit: Oracle raised $25 billion this month to strong demand, and banks forecast that hyperscale cloud providers could borrow roughly $400 billion in 2026.
The broader implications are twofold. For issuers, locking in long‑term funding at historically low spreads against sovereigns helps underwrite capital‑intensive AI strategies and spreads refinancing risk. For markets, a surge in high‑grade issuance — likely to push 2026 corporate supply toward record levels — will test investor appetite and could compress spreads further, while exposing both companies and bondholders to long‑dated interest‑rate risk should the macroeconomic backdrop shift.