Google logo. [Reuters]
Google logo. [Reuters]

Alphabet, Google's parent company, has launched another bond offering after posting a quarterly free cash flow deficit driven by heavy investment in AI infrastructure.

Bloomberg and Reuters reported Thursday that Alphabet is issuing up to $25 billion in dollar-denominated corporate bonds.

The offering comprises 10 tranches with maturities ranging from two to 40 years. The yield on the longest-dated 40-year tranche is being discussed at roughly 1.3 percentage points above comparable US Treasury rates.

Investors submitted orders exceeding $115 billion — more than four times the size of the offering.

Alphabet also moved to ease investor concerns about oversupply, saying it plans to limit its US corporate bond issuance to twice a year going forward.

The aggressive fundraising reflects a growing cash strain from AI infrastructure spending. Alphabet has raised its annual capital expenditure guidance twice this year, committing $205 billion in total investment.

The scale of that spending pushed Alphabet into a free cash flow deficit in the second quarter — the first time since its initial public offering in 2004.

Alphabet has raised more than $50 billion through bond sales in the United States, Europe and Japan this year, and in June it completed a massive $85 billion share offering.

Combined bond issuance by major US data center operators, including Alphabet, reached $194 billion as of July 7, a 79% jump from the same period a year earlier.


yckim6452@heraldcorp.com