Market Overview

Google Parent Raises $10B In Debt Offering, Sets Record For Low Prices

Google Parent Raises $10B In Debt Offering, Sets Record For Low Prices

Alphabet Inc’s  (NASDAQ: GOOGL) (NASDAQ: GOOG) $10 billion bond sale held Monday, the first since 2016, achieved record-low borrowing costs for a company in the United States, the Financial Times reported.

Debt Raised At Knockdown Rates 

The tech titan sold bonds across six maturities between five to 40 years, according to the Financial Times sources. The Google parent company's double A-plus rated 10-year bond sold at the coupon of 1.1%, priced well below, Inc’s (NASDAQ: AMZN) 10-year US dollar bond issued at a coupon of 1.5% earlier this year.

Bonds issued across the five, seven, and 30-year maturities also benefitted from record low coupon rates with the five-year bond priced at 0.45%, lower than both U.S. government, Pfizer Inc (NYSE: PFE) and Amazon bonds of similar maturities.

Largest Green Bond Offering Ever

Alphabet claims that its $10 billion debt offering, in which they issued $5.75 billion in sustainability bonds, is the largest green bond offering by any company in history.

“The proceeds from these sustainability bonds will fund ongoing and new projects that are environmentally or socially responsible and enable investors to join us in tackling critical issues,” the company said in a statement.

Corporate America’s Cost Of Borrowing Falls

Federal Reserve's pledge to buy investment-grade debt has bolstered the market, which is flush with investor funds, the Financial Times noted.

Companies are refinancing debt and even bringing ahead bond issuances in order to reduce their cost of borrowing. Praxair, an industrial gas supplier, and JetBlue Airways Corporation (NASDAQ: JBLU), also issued bonds on Monday, raking in a total of $17.4 billion, according to Refinitiv.

Price Action 

Alphabet Class A shares closed 0.35% lower at $1,482.76 on Monday. The company’s Class C shares closed nearly 0.6% lower at $1,474.45 on the same day.


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