Key facts
- Alphabet is planning its first-ever bond issuance in Australian dollars.
- The tech giant is considering 3-, 5-, 10-, and 20-year bond maturities.
- Alphabet recently raised $25 billion in dollar bonds and $85 billion in equity.
- Global tech companies are increasing reliance on capital markets for AI spending.
- Australian dollar "Kangaroo" bond sales by foreign issuers are at a record high.
Alphabet has mandated investment banks to arrange its first-ever bond issuance in Australian dollars, according to a message reviewed by Reuters. The U.S. technology giant is considering offering bonds with maturities of 3, 5, 10, and 20 years. The shorter-term 3- and 5-year bonds may be issued with fixed or floating rates, while the longer-term 10- and 20-year bonds would carry fixed rates.
This move comes as global technology companies increasingly turn to capital markets to fund substantial artificial intelligence investments, a trend that has begun to strain corporate cash flows. Alphabet itself reported its first-ever negative free cash flow in its second-quarter earnings. The company had previously raised $25 billion in dollar bonds earlier in August and nearly $85 billion through an equity capital raise in June.
Issuers are diversifying their funding strategies by tapping into local currency markets. Sales of "Kangaroo" bonds, issued by foreign entities in Australian dollars, have reached a record high of approximately A$60 billion ($42 billion) so far this year, marking a significant increase from previous years. ANZ, Deutsche Bank, RBC Capital Markets, and TD Securities are serving as joint lead managers for Alphabet's upcoming transaction.