Alphabet Eyes Inaugural Australian Dollar Bond as Tech Giants Seek Capital Markets

Alphabet is considering its first Australian dollar bond issue, according to a message sent by one of the book runners. The US tech giant has mandated investment banks to work on the deal, with ANZ, Deutsche Bank, RBC Capital Markets, and TD Securities as joint lead managers.

The company is looking to issue bonds with varying maturities: 3-, 5-, 10- and 20-year notes. The shorter-term bonds could be issued with fixed or floating rates, while the longer-term bonds would have fixed rates.

This move comes as tech companies increasingly rely on capital markets to fund their massive AI spending. Alphabet raised $25 billion in dollar bonds earlier in August following an almost $85 billion equity capital raising in June. The company posted its first negative free cash flow in its second-quarter report in late July, highlighting the need for further funding.

The Australian dollar bond market is booming, with 'kangaroo' bond sales from foreign issuers reaching a record high of A$60 billion ($42 billion) so far this year. This trend reflects local currency bonds becoming increasingly popular among big issuers seeking to diversify their reliance on dollar bond transactions.