In what could be the largest corporate debt transaction in Australian history, the bond will bolster the AI and technology giant’s wallet as it looks to gear up for the AI arms race.
In July, the company announced that it wanted to spend between US$195 billion and US$205 billion in 2027 in an effort to catch up to leaders in the space, OpenAI and Anthropic.
The company had raised billions previously, including US$25 billion ($35 billion) in the US, as well as having sold bonds in Japan, Canada and the Swiss market. In March, the company also issued a £1 billion ($1.9 billion), 100-year bond in the UK.
The $5 billion bond, which marks the first time the company has raised debt in Australia and the first time a major US company has done so in almost a decade, will be facilitated by a number of financial institutions globally, including Deutsche Bank, RBC Capital Markets, TD Securities, and ANZ.
While the size of the Kangaroo bond has not been disclosed publicly, sources speaking with media that requested anonymity said that Alphabet was hoping to raise between $4 billion and $5 billion. If the company achieves this goal, it will be the largest corporate debt issue in Australia, doubling the previous record of $2.25 billion held by Apple.
Betashares’ head of fixed income, Chamath De Silva, said the bond might open new opportunities for the Australian corporate bond market.
“An Alphabet transaction would begin to change that, broadening the opportunity set for Australian investors while increasing technology representation in the Australian corporate bond market,” De Silva said, adding that it could also be the start of a wider trend that would allow local investors better access to global technology firms without needing to invest overseas.
The Kangaroo bond is expected to bring in passive buyers, with the debt to be featured in a majorly popular bond index.
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