Google’s Alphabet set to raise $2.8 billion in bond sale

Alphabet Inc., Google’s parent company, plans to raise around $2.8 billion (€2.5 billion) from a debt euro bond sale on Tuesday. This comes after the tech giant sold $5 billion of debts in the United States on Monday. According to reports, the company plans to direct the sale to repay its outstanding debt and for other general corporate purposes.

The deal, which is expected to be priced later today, will see the company offer a rare five-part deal alongside benchmark sizes and maturities between 4 and 29 years. In addition, the initial price offerings are expected to range from 85 basis points over mid-swaps for the 4-year tranche, to around 190 basis points above for the 29-year securities.

The bond sale comes amid companies’ rush to raise funding after credit markets recovered much of their initial slide, stoked by President Donald Trump’s trade announcements. Several deals have been met with delays owing to the U.S. tariff swings, and given the uncertainty over the policies and what the future holds for the world’s biggest economy, the earlier, the better for Google’s parent company.

According to Bloomberg, the 29-year bond in euros would be the second-longest corporate bond sold in Europe this year. The deal is managed by Goldman Sachs Group Inc., HSBC Holdings Plc, and JPMorgan Chase & Co. as global coordinators, along with Barclays Plc and Deutsche Bank AG as bookrunners.

Analysts have explained that Alphabet’s bond sale might lower its cost of capital, as the funds raised would be spent on outstanding debts. On a lighter note, the development might also open doors for larger future buybacks and AI capital investments.

Also Read: Google records $90.23 billion revenue in Q1 2025.

Google’s Alphabet boosts financial strength 

While experts pointed out that the company is not lacking money with its $95 billion cash balance and the ability to generate close to $300 billion in free cash flow over the next three years, its $5 billion offering on Monday was the company’s first since 2020 – when it raised $10 billion.

Other companies at Monday’s offers included Procter & Gamble Co., the maker of Crest toothpaste and Dawn dishwashing liquid, and homebuilder D.R. Horton Inc.. The deals spanned across 15 companies, and the total money raised was the most since March 24’s $24.15 billion, after companies sold more than $18 billion of high-grade bonds on Monday.

The U.S. bond sale was tagged as a promising sign that debt markets are stabilising after the turmoil brought about by tariff announcements early this month. 

For Google’s Alphabet, the priced $5 billion in debt was in four parts, with the longest portion of the sale, a $1.5 billion 40-year bond, yielding 70 basis points more than Treasuries, versus initial price talk of as much as 105 basis points. As of March 31, the company had more than $95 billion of cash and marketable securities on its books.

With a significant cash balance of $95 billion and an expected free cash flow of nearly $300 billion over the next three years, Alphabet will look to optimise its business growth with the bond sale strategy. 

The fundraising comes amid the release of the company’s Q1 2025 financial results at the close of last week. Google’s parent company, Alphabet, recorded a $90.23 billion total revenue driven by Google services: Google Search, YouTube, Subscriptions, and Networks. The total also represents a 12% growth for the tech giant year on year.

In the report, its Search & other, YouTube ads, Google subscriptions, platforms and devices, and Google Cloud delivered double-digit growth rates, contributing about 85.6% of the company’s revenue.

Specifically, YouTube ads recorded a total of $8.9 billion in revenue. Network followed with $7.2 billion, and Search with $50.7 billion. Its Gemini 2.5 pro and AI Overview also had a significant impact on its Q1 2025 performance.