Alphabet has sold 576.5 billion yen in bonds, the company disclosed via a term sheet on Friday, marking its first issuance denominated in Japanese yen and the largest-yet yen offering by a non-Japanese corporate issuer. The amount converts to roughly $3.6 billion using the published rate of $1 = 158.4500 yen.
The transaction expands Alphabet's use of foreign-currency bond markets. The parent company of Google has previously tapped debt markets in euros, sterling, Canadian dollars and Swiss francs. In announcing the yen sale, Alphabet positioned the move within wider efforts to broaden its funding sources during an extensive investment phase focused on artificial intelligence.
The term sheet shows the new bonds span a wide range of maturities - 3, 5, 7, 10, 15, 30 and 40 years - and carry coupons that range from 1.965% up to 4.599%. Underwriting for the deal is being led jointly by Mizuho Securities, Bank of America and Morgan Stanley.
Mizuho Securities, one of the joint bookrunners, said demand for the yen bonds was strong among both domestic and international investors. The sale surpassed the previous foreign-issuer record in the yen market, a 430 billion yen issue placed by Berkshire Hathaway in 2019.
Alphabet has signalled an unusually large capital spending programme this year, flagging capital expenditure of as much as $190 billion. The company has been accessing multiple currency markets as it seeks to diversify its sources of funding while it pursues those investment commitments.
Deal specifics
- Size: 576.5 billion yen (approximately $3.6 billion)
- Maturities: 3, 5, 7, 10, 15, 30 and 40 years
- Coupon range: 1.965% - 4.599%
- Joint bookrunners: Mizuho Securities, Bank of America, Morgan Stanley
- Exchange rate used: $1 = 158.4500 yen
The offering is the latest instance of a major technology company accessing global debt markets while pursuing significant capital projects. According to the term sheet, investor interest covered both Japan-based and overseas accounts, supporting the size and structure of the transaction.
While this marks Alphabet's debut in yen debt, the company has a history of issuing in a range of other currencies, and the scale of the sale sets a new benchmark for foreign corporates raising yen funding.