Alphabet (GOOGL.US) debuted on the Australian dollar bond market. The 20-year financing cost was close to 7%, setting a corporate record, and subscription demand exceeded 20 billion Australian dollars

The Zhitong Finance App learned that US tech giant Alphabet Inc. (GOOGL.US) first entered the Australian dollar bond market, and its long-term bond financing cost was close to 7%, or the highest coupon interest record in the company's history. This signal highlights that global hyperscale technology companies are competing to “suck in gold” and are driving up capital costs in almost every market.

According to email guidelines from ANZ (ANZ), one of the leading underwriters, Alphabet will price a multi-term Australian dollar bond on Wednesday (August 19). The 20-year model has an indicative yield of about 6.95%, which is the longest term portion of this offering, and the final pricing may change.

Even for Alphabet, such high borrowing costs reflect more of the macro background of global multi-country yields rising to decades-high levels this week rather than concerns about its credit situation. Alphabet's parent company has the second-highest credit rating in S&P Global Ratings. However, rekindled inflation and centralized debt issuance by the government and large technology companies made the market worried about investors' ability to absorb them, which in turn boosted financing premiums.

Since this year, tech giants have raised hundreds of billions of dollars to support AI ambitions, and the market is worried that this wave of financing — which may still be in its early stages — will divert demand for sovereign bonds and exacerbate financial concerns. Since 2026, Alphabet has ranked second among the largest US companies in terms of global cross-currency bond issuance, second only to Amazon.

According to ANZ, Alphabet plans to raise up to 5.5 billion Australian dollars (about 3.9 billion US dollars) this week, and investor subscription demand has already exceeded 20 billion Australian dollars.

Chamath De Silva, head of fixed income at Australian asset management firm Betashares, said: “Investors see this as a good opportunity to step into one of the world's strongest corporate balance sheets at an attractive price. The over $20 billion subscription order says it all.” He anticipates that Amazon will be the next large-scale technology company to enter the Australian bond market.

Corporate bonds usually use sovereign bonds or base interest rates that are highly affected by interest rate trends as pricing anchors. Therefore, when sovereign financing costs rise, corporate bond issuance costs also soar. This week, the yield on US 30-year Treasury bonds rose to the highest level since 2007, and borrowing costs in France and Germany also hit multi-year highs.

According to ANZ, Alphabet's 20-year Australian dollar bond issuance spread is 180 basis points higher than the local benchmark interest rate. Overall, the issuer will concentrate most of the bonds in the short-term portion of five years or less. Investors in this range can still obtain a yield of 5% or more, according to ANZ guidelines.