Google’s parent company, Alphabet (GOOGL), has reportedly made history with the largest-ever yen bond sale by a foreign company in Japan. The tech giant raised ¥576.5 billion as it continues its spending on AI infrastructure, cloud computing, and data centers amid rising competition in the AI race.
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For context, yen bonds are bonds issued in Japanese yen, the currency of Japan. In Alphabet’s case, the company issued yen bonds to raise funds from Japanese investors while potentially benefiting from lower borrowing costs in Japan.
Alphabet Pulls Off Historic Yen Bond Sale
According to Bloomberg, citing people familiar with the deal, the debut yen bond from Alphabet included ¥200.5 billion of five-year notes priced at 50 basis points over mid-swaps. The issuance also featured six additional tranches.
The latest bond sale is part of a broader borrowing spree by Alphabet, which has raised nearly $60 billion in bonds over the past four months—one of the largest corporate debt-raising runs on record.
Alphabet has been aggressively increasing spending to support its growing AI ambitions. Along with its first-quarter earnings, the company raised its annual capital expenditure forecast by $5 billion to a range of $180 billion–$190 billion, signaling heavier investment in AI infrastructure, data centers, and cloud expansion. Management also suggested that spending could rise further in 2027 as competition in the AI sector continues to intensify.
Japanese Investors Rush Into Big Corporate Bonds
The deal highlights growing demand in Japan’s yen bond market as companies increasingly raise funds for AI infrastructure and data centers. According to Bloomberg data, yen bond issuance from non-Japanese companies has surged more than 280% this year, reaching ¥1.6 trillion.
Notably, Taketoshi Tsuchiya, president of Fujiwara Capital, said that while “U.S. investors are showing signs of fatigue, Japanese investors remain yield-hungry and are willing to snap up paper from big-name issuers such as Alphabet.”
The strong response to Alphabet’s bond sale could also encourage more global companies to tap the yen market. For example, Berkshire Hathaway (BRK.B) has been a regular issuer since 2019 and most recently returned to the market in April.
Is Google Stock a Buy, Sell, or Hold?
Overall, Wall Street analysts have a Strong Buy consensus rating on GOOGL stock based on 28 Buys and five Holds assigned in the past three months. The average GOOGL price target of $426.44 per share implies a 6.32% upside potential.
