Alphabet is planning its first yen-denominated bond sale across up to eight maturities, expected to total several hundred billion yen, as part of a broader push to fund $190 billion in AI capital spending this year.
Summary:
- Alphabet is planning its first yen-denominated bond sale in a multi-tranche offering spanning maturities of three, five, seven, ten, fifteen, twenty, thirty and forty years, subject to demand
- The issuance is expected to total several hundred billion yen, though the term sheet did not disclose a precise size
- The deal is part of an effort to diversify Alphabet’s funding currencies and investor base; the company has previously issued bonds in euros, sterling, Canadian dollars and Swiss francs
- Alphabet’s capital spending doubled year-on-year in the first quarter and the company has guided for up to $190 billion in total capex this year
- Big Tech is collectively expected to spend more than $700 billion on AI infrastructure in 2025, up sharply from $410 billion in 2024, driving increased reliance on debt markets
- Amazon is separately preparing its first Swiss franc bond offering in a six-part deal; Alphabet has mandated Mizuho, Bank of America and Morgan Stanley to manage its yen transaction
Alphabet, the parent company of Google, is preparing its first yen-denominated bond sale, according to a term sheet seen by Reuters, as the technology giant joins a growing cohort of American companies tapping overseas debt markets to fund the surging costs of artificial intelligence infrastructure.
The offering will be structured across multiple tranches, with maturities spanning three, five, seven and ten years as well as longer-dated notes of fifteen, twenty, thirty and forty years, though one or more tranches may be dropped depending on investor demand and market conditions. The total size of the issuance was not disclosed in the term sheet, but a source with direct knowledge of the deal told Reuters the offering was expected to total several hundred billion yen.
The move into the yen market reflects a deliberate strategy to diversify Alphabet’s funding base beyond its existing currency mix, which already includes euros, sterling, Canadian dollars and Swiss francs. Investor appetite for yen-denominated bonds has remained resilient despite the Iran war, with an expanding issuance pipeline heading into mid-year. Overseas participation in the Japanese bond market has also been rising as interest rates in Japan climb under the Bank of Japan’s gradual policy normalisation, making yen assets increasingly attractive to international issuers and buyers alike.
The scale of Alphabet’s financing ambitions underscores the extraordinary capital demands of the AI race. The company’s capital expenditure doubled year-on-year in the first quarter, and Alphabet has indicated it expects to spend as much as $190 billion on infrastructure this year. Across the broader technology sector, AI-related capital spending is forecast to exceed $700 billion in 2025, a sharp acceleration from $410 billion the previous year. That spending trajectory has pushed large technology companies to lean increasingly on debt markets after years of relying primarily on their substantial internal cash flows.
Alphabet is not alone in looking beyond dollar markets. Amazon is separately preparing its first Swiss franc bond offering in a six-part structure, underscoring that the move to diversify funding currencies is a sector-wide response to the scale of AI investment required rather than a company-specific decision.
Mizuho, Bank of America and Morgan Stanley have been mandated to manage Alphabet’s yen transaction.
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Alphabet’s debut in the yen bond market is a significant signal for Japanese fixed income, adding a high-grade foreign issuer to a market already seeing rising overseas participation as BOJ rate normalisation makes yen assets more attractive. The multi-tranche structure spanning maturities out to 40 years suggests strong confidence in Japanese investor appetite at current and anticipated yield levels. For broader markets, the scale of AI-driven debt issuance, with Big Tech expected to spend more than $700 billion on infrastructure this year alone, points to sustained corporate bond supply that will keep credit spreads under scrutiny. The parallel move by Amazon into Swiss franc issuance underlines that the diversification away from dollar funding is a sector-wide trend rather than an Alphabet-specific decision.
This article was written by Eamonn Sheridan at investinglive.com.
