Alphabet kicks off euro bond sale, tests appetite for tech debt

Google parent Alphabet GOOGL-Q kicked off a euro-denominated bond sale on Monday, according to a memo from one of the banks arranging the deal, testing investor appetite after a selloff in tech stocks and bonds as confidence in the AI trade wobbled.

The bond sale is Alphabet’s second euro-denominated sale this year. In May, it sold €9-billion (US$10.1-billion) of bonds, following a rare 100-year sterling bond sale in February.

Alphabet is offering the new bonds across seven tranches, according to the memo seen by Reuters. The bonds, expected to be priced later on Monday, have maturities ranging from 2 to 19 years.

Concerns about the financing required to support heavy spending on artificial intelligence, and the returns needed to justify that investment, have weighed on technology stocks and bonds in recent weeks. The tech-heavy Nasdaq fell 5 per cent in October.

The latest bout of volatility has been fuelled by disappointing quarterly results from Alphabet and Amazon AMZN-Q, two of the biggest spenders on data centres.

Still, analysts expect major tech companies to step up bond issuance in Europe as they seek funding for infrastructure investment and tap into the region’s deep and liquid debt markets.

The deal marks Alphabet’s latest return to European debt markets. Its May bond sale comprised six tranches.

Alphabet shares were up about 1.3 per cent in premarket trading. The company’s U.S.-listed shares fell nearly 19 per cent in October, their worst monthly performance on record.

Its dollar-denominated 4.1 per cent bond due in 2031 was little changed on Monday at about 95.43 cents on the dollar.