Alphabet Inc. has formally disclosed a substantial bond offering totaling $20 billion, delineated across seven distinct tranches designed to span maturity dates from 2029 through 2066. This strategic capital market move was documented in a submission made to the Securities and Exchange Commission, underscoring the tech conglomerate’s intention to leverage debt instruments for financing purposes.
The specifics of the bond issuance illustrate a diverse array of maturities and coupon rates: $2.5 billion in notes bearing a 3.700% interest rate due in 2029; $3 billion at 4.100% maturing in 2031; another $3 billion with a 4.400% coupon slated for 2033; $4.25 billion carrying a 4.800% yield payable in 2036; $1.5 billion at 5.500% due in 2046; $4 billion offering 5.650% interest reaching maturity in 2056; and a final tranche of $1.75 billion at 5.750% come 2066. The announcement specifies the trade date as February 9, accompanied by a settlement date four days later, on February 13.
The bond issuance is underpinned by robust creditworthiness, with Moody’s assigning a Aa2 rating with a stable outlook and Standard & Poor’s rating the notes AA+ with a stable perspective. These esteemed credit assessments reflect Alphabet’s strong financial position and lend confidence to prospective investors regarding the company's debt servicing capacity.
Moreover, the filing also mentions the potential for Alphabet to conduct supplemental offerings denominated in British pounds and Swiss francs in the near term; however, these additional sales are explicitly noted as independent from the completion conditions of the primary U.S. dollar bond issuance.
Despite the strong ratings, the market reaction has been tempered, as evidenced by the decline in Alphabet's share price coinciding with the bond filing. Trading data indicates that the stock price dropped to $314.98 per share, amounting to a 2.90% decrease on the day of the announcement, reflecting cautious investor sentiment amid ongoing financing activities.
Adding a layer of critical perspective, prominent investor Michael Burry expressed skepticism regarding Alphabet’s apparent move to issue century-long bonds. On a well-followed social media platform, Burry highlighted this measure by recalling that Motorola’s issuance of 100-year bonds in 1997 preceded a decline in its market prominence, implying potential risk associated with such extended debt horizons.
This bond fundraising effort arrives alongside significant capital expenditure projections from Alphabet. Notably, CEO Sundar Pichai disclosed during the fourth-quarter earnings call that the company foresees capital investments ranging between $175 billion and $185 billion for 2026. This substantial allocation toward growth and infrastructure might provide context for the necessity of large-scale debt issuance.
Market analytics further contextualize Alphabet’s current standing. Utilizing Benzinga Edge’s proprietary scoring system, Alphabet’s Class C capital stock demonstrates strengths in quality and momentum categories, scoring 95.17 and 92.46 respectively. These metrics suggest a solid balance sheet and favorable recent performance compared to broader market benchmarks. Yet, the stock reflects a valuation concern, registering a relatively weak value score of 31.5, indicative of its premium price relative to comparable entities.
These factors collectively portray a company balancing aggressive investment and financing strategies with investor caution. While Alphabet’s credit ratings affirm its robust financial status, responses from market participants and key figures underscore the complexities and uncertainties inherent in its approach to capital markets and long-term borrowing.