Alphabet Enters Australian Bond Market With $3.9B Sale
Synopsis
Alphabet has entered Australia’s bond market with a $3.9 billion debt sale, giving the tech giant another funding source as AI investment accelerates.
Alphabet has issued its first bond in Australian dollars for A$5.5 billion (US$3.89 billion), seeking to tap the local bond market, in which multinational technology firms are eager to raise funds for large-scale infrastructure needs.
The 19 August issue comprised three-, five-, 10- and 20-year bonds, with the 20-year swap offering a 6.9% coupon. Investors subscribed for more than AUD18 billion, according to the transaction terms, against more than triple the proceeds.
The deal was arranged by ANZ, Deutsche Bank, RBC Capital Markets and TD Securities, with Alphabet not commenting on the fundraising when approached for a comment.
Alphabet Broadens Global Debt Funding
The Australian dollar (A$) comes on top of Alphabet’s borrowing spree across international markets this year. It has tapped the US dollar, British pound, Swiss franc, euro, Canadian dollar (CAD) and now – the A$.
The A$ issue is known as a Kangaroo bond, a term used for Australian-dollar bonds issued by overseas borrowers, and the latest in a string of debt offerings by Alphabet after its recent initial public offering (IPO).
It coincides with Alphabet’s mounting investments in infrastructure and data-centre hardware. For the three months ended 30 June, Alphabet posted revenues of US$119.8 billion, a 24% increase from a year before.
Google Cloud revenue jumped 82% to US$24.8 billion, while spending US$44.9 billion on capital expenditure during the second quarter. The company also had negative free cash flow of US$5.8 billion, netting it the first-ever negative quarterly free cash flow, due to increased outflows.
Australian Bond Market Draws Overseas Borrowers
Alphabet’s recent bond offering comes after a spurt in demand from overseas issuers looking to raise funds in Australia, with data, according to the transaction documenting, indicating that kangaroo bond sales are set to hit A$60 billion in 2026, up 40% on 2025.
Alphabet, along with peers, is set to continue to spend billions on AI infrastructure, with the latest industry data, published, estimating that tech titans are set to spend over US$730 billion on artificial intelligence (AI) in 2026.
The alphabet transaction taps into Asia’s growing influence, offering one of the largest technology borrowers in the US a foreign market in which it is eager to raise more funds. It highlights the shift among multinational technology firms towards funding their operations in non-dollar markets.
Source: Reuters
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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