Bloomberg: Alphabet tests investors’ faith in AI with new euro bond sale

Google parent Alphabet is tapping the euro bond market for the second time this year, offering considerably higher yields than in its previous sale, Bloomberg reports, citing a person familiar with the matter. The company launched the offer after concerns about the pace of AI spending triggered a credit-market selloff. Alphabet’s third-quarter earnings report helped fuel the rout.

Alphabet opened the order book for a seven-part bond offering with maturities ranging from two to 19 years, a source told Bloomberg. The company is offering yields of around 60 basis points above the market benchmark on the two-year bonds and 205-210 basis points above it on the 19-year debt, the source said. That amounts to an average new issue premium of 45 basis points across the offering, on Bloomberg's numbers. The wider spreads reflect a decline in the prices of Alphabet’s existing euro bonds, Bloomberg writes.

The offer will total at least EUR3.5 billion, Bloomberg reports. Together with its EUR9 billion sale in May, this is set to make Alphabet the largest corporate issuer of euro-denominated debt in a single calendar year, according to Bloomberg. Amazon currently holds the mantle, having raised EUR14.5 billion in March.

Barclays, BNP Paribas, and Deutsche Bank are arranging the sale. Final terms are expected to be set later on Monday.

Alphabet stock was up 1.5% in premarket trading on Monday, in line with other tech stocks. Following Friday’s selloff and ahead of Apple’s quarterly earnings, Nasdaq 100 futures gained around 1%.

Alphabet and other hyperscalers are issuing debt at a record pace to fund the AI investment race, even as investors increasingly question whether the massive spending will pay off. Alphabet’s earnings report last week underscored the stakes: disappointing search and advertising sales wiped a record $500 billion off its market value in a single day.

On Friday, the cost of insuring Alphabet’s debt against default had its biggest-ever jump, reaching an all-time high of almost 91 basis points. Other tech giants face similar headwinds. Their credit default swap spreads have widened more than the broader market this year as traders use the contracts to hedge against the risk that AI, the dominant theme in the market, fails to live up to the hype, Bloomberg notes.

“The spreads just keep widening and they keep issuing,” Bryn Jones, head of fixed income at Rathbones Group, told Bloomberg. “I need to see return on capital employed, or return on investment, or debt issuance to slow in this space before we get more involved.”

The AI borrowing binge has helped push global bond issuance to record levels in 2026: companies have borrowed around $500 billion for data centers, chips, and other AI projects, versus around $200 billion in all of 2025, according to Bloomberg data. Tech giants are expected to continue borrowing heavily. Last week, Alphabet’s management maintained its capex outlook of as much as $205 billion for this year. Together, Alphabet, Meta, Microsoft, Amazon, and Oracle have committed more than $3 trillion in spending over the coming years, Bloomberg notes.

Microsoft returned to the debt market last week, drawing a rush of demand. Orders for its bonds reached $115 billion, or 4.6 times the offering’s size, Bloomberg reports, citing sources. That made it one of the most sought-after U.S. corporate bond sales on record.