Alphabet $GOOGL sold ¥576.5 billion ($3.6 billion) in yen-denominated bonds on Friday, the largest such offering by a foreign company, as the Google parent seeks to diversify funding sources for its AI spending program.
Surpassing Berkshire Hathaway $BRK.B's ¥430 billion offering from 2019, it marks the largest-ever yen bond sale by a foreign issuer, according to Nikkei Asia. Underwriter Mizuho Securities reported robust appetite from investors in Japan and abroad.
Coupons on the seven tranches — spanning tenors of 3, 5, 7, 10, 15, 30, and 40 years — run from 1.965% to 4.599%. The bookrunning syndicate was led by Mizuho Securities alongside Bank of America $BAC and Morgan Stanley $MS.
Alphabet has flagged capital expenditure of as much as $190 billion this year. According to Bloomberg, the yen offering is the latest in a string of debt transactions that have together netted the company nearly $60 billion. A euro deal and a debut Canadian dollar offering earlier this month together brought in close to $17 billion, while previous transactions in sterling and Swiss francs have further extended the company's funding reach across currencies.
Foreign yen bond issuance has climbed alongside the broader AI infrastructure buildout. Bloomberg data show foreign issuers have flooded the yen bond market this year, with volume up more than 280% to reach ¥1.6 trillion.
"While U.S. investors are showing signs of fatigue, Japanese investors remain yield-hungry and are willing to snap up paper from big-name issuers such as Alphabet," Taketoshi Tsuchiya, president of Fujiwara Capital Co., told Bloomberg.
Turbulence in Japanese government bonds — a byproduct of the Bank of Japan unwinding its decades-long ultra-loose policy stance — has sharpened investor appetite for the premium that corporate paper offers. On the Alphabet deal, buyers of the 10-year tranche locked in a 3.189% coupon, well above the roughly 2.71% available on a comparable sovereign issue, according to Bloomberg.