More than 200 investors from around the world rushed to snag a piece of Alphabet’s record-breaking $5.5 billion debt debut in Australia, triggering demand so intense that it’s been hailed as the bond market equivalent of Elon Musk’s highly anticipated SpaceX IPO.
The deal by the Google and Gemini parent marks the largest corporate bond sale in Australian history outside the banking sector and governments which at one stage lured more than $20 billion worth of orders.
“It’s a bigger deal than people realise,” said Chris Selby, the vice chairman of $8 billion wealth advice business Escala Partners, which bought the 3-year and 5-year tranches on behalf of its clients.
“It’s a major global corporate that has a wealth of opportunities to issue almost anywhere it wants, and it can issue here and get reasonably good volume. You should expect that it will likely come back to sell more bonds.”
The deal landed amid intense global interest in the artificial intelligence trade and the hyperscalers – giant digital infrastructure companies such as Amazon and Meta – which are spending hundreds of billions of dollars to expand their cloud computing and data centre capacity.
Australian investors managed to snag around 60 per cent of Alphabet’s first kangaroo bond, while Asia took 20 per cent with the rest sold across Europe and other countries, according to one person close to the deal who requested anonymity.
“The Asian bid is exceptionally strong in Australia, and it’s definitely holding up the demand side of the equation,” said Helen Mason, head of Australian credit at Schroders Investment Management, which manages $1.7 trillion globally and also bought some bonds.
“Five years ago, the Australian market wouldn’t have been able to absorb that kind of issuance.”
By investor type, the vast majority was allocated to long-term buyers such as asset managers, while less than 20 per cent went to fast money traders like hedge funds who are typically short-term holders.
Alphabet, which was initially aiming to raise between $4 billion to $5 billion, capped the deal at $5.5 billion to avoid flooding the market. That meant that investors did not receive their full orders with the high demand allowing the tech giant to pay a lower interest rate than buyers had hoped.
Source: https://www.afr.com/markets/debt-markets/alphabet-s-5-5b-bond-debut-lures-more-than-200-investors-20260819-p60pun