As part of a huge debt issuance plan, Google parent company Alphabet has planned to issue an extremely rare 100-year bond. This is the first time since the late 1990s that a global technology company has auctioned such ultra-long-term debt.
The 100-year bond will be denominated in pounds sterling, along with four other maturities that will also be denominated in the currency, according to people familiar with the matter. The deal, Alphabet's first sterling bond issuance, could be priced as early as Tuesday, the person added.
According to data compiled by the industry, this is the first time a technology company has issued such an ultra-long-term bond since Motorola issued such bonds in 1997.
Currently, the 100-year bond market is dominated by institutions such as governments and universities. For companies, potential acquisitions, business model obsolescence and the risk of technology obsolescence make such deals extremely rare. However, even these rare deals are making a comeback given the huge amount of financing currently required by global technology companies to stay at the forefront of building artificial intelligence capabilities.
"They (Google) want to tap every potential investor from structured finance investors to very long-term investors," said Gordon Kerr, European macro strategist at KBRA. He noted that the main buyers of the 100-year bond will be insurance companies and pension funds, and "the people who underwrote the deal may not be around by the time the debt is repaid."
Why was the Centenary Bond chosen to be issued in GBP?
Currently, strong demand from UK pension funds and insurance companies is making the pound market the preferred venue for issuers seeking long-term financing.
However, according to industry statistics, apart from government issuers, only EDF, the University of Oxford and the charity foundation Wellcome Trust Ltd have previously issued 100-year bonds in the pound market.
All of these bonds mentioned above are issued in 2021. Yields on sterling's top-rated bonds hit record lows that year, according to industry indexes. Due to the extremely long "duration" of these bonds, all current prices for these bonds are well below their face value.
Of the three transactions, Wellcome Trust bonds, which have the lowest coupon, are currently trading at 44.6 pence per pound of face value, according to data compiled by the industry.
At the same time, not all ultra-long bonds will survive. For example, troubled retailer J.C. Penney filed for bankruptcy in 2020, just 23 years after it issued its Centennial Bond.
For companies, potential acquisitions, business model obsolescence and technology obsolescence risks make such deals extremely rare. In fact, even the last technology company to issue a century-old bond in 1997, Motorola, was almost its "last glory" as an industry hegemon in that year.
At the beginning of 1997, Motorola was among the top 25 companies in the United States in terms of market capitalization and revenue. Since then, this situation has never happened again. In 1997, the Motorola brand ranked first in the United States, surpassing Microsoft. But by 1998, Motorola had been surpassed by Nokia in the field of mobile phones. After the advent of the iPhone, even Nokia quickly faded from consumers' horizons. Today, Motorola ranks 232nd in market capitalization, with annual sales of only about $11 billion.
Regardless, 100-year bond issuances will remain a rarity. "It's hard to say whether these types of bonds will become the norm, even in the Treasury market," said KBRA analyst Kerr.
Tech giants unleash tsunami of debt issuance
Alphabet’s 100-year sterling bond issuance will be synchronized with a multi-tranche bond issuance in the U.S. dollar market. The U.S. technology giant on Monday planned to raise $20 billion through its U.S. dollar bond issuance, up from the $15 billion initially expected. The company also plans to issue bonds in Swiss francs for the first time, according to another person familiar with the matter.
Alphabet last entered the U.S. bond market in November last year, when it issued bonds worth $17.5 billion and attracted about $90 billion in subscriptions. According to data compiled by Bloomberg, the 50-year bond issued in the transaction was the longest among U.S. dollar-denominated technology corporate bonds last year, and the bond performed well in the secondary market. The company also issued 6.5 billion euros ($7.7 billion) of bonds in Europe at the time.
This huge debt financing comes only a week after Alphabet announced that it will reach $185 billion in capital expenditures this year (double from last year) to support artificial intelligence plans.
Other technology companies, including Meta and Microsoft Corp., have recently announced huge spending plans for 2026.Google's debt issuance plan on Monday almost closely follows Oracle's $25 billion bond sale disclosed in a securities filing on February 2. As artificial intelligence companies compete to expand data center layout and processor needs, the spending and borrowing scale of these technology giants are growing rapidly in parallel.
Barclays analysts reported in January that total U.S. corporate bond issuance is expected to reach $2.46 trillion this year, an increase of 11.8% from 2025.
Morgan Stanley expects borrowing by cloud computing giants known as hyperscalers to increase to $400 billion this year from $165 billion in 2025. They believe that these artificial intelligence-related bond issuances will drive the scale of bond issuance to as high as US$2.3 trillion this year.
The issuance of bonds by Oracle and Google parent Alphabet in early 2026 is not surprising, but it is significant - one corporate bond fund manager pointed out that behind this is "one of the largest capital expenditures we have experienced in a generation."