Alphabet(US:GOOGL) CNBC·2026-02-12 10:09Core Viewpoint - Alphabet's issuance of a 100-year sterling bond signifies a trend of increased borrowing among tech companies to finance AI and data center expansions, reflecting a late-cycle exuberance in credit markets [1][4][6]. Group 1: Bond Issuance Details - The 100-year bond is part of a larger borrowing initiative totaling approximately $20 billion, which includes multiple currencies and maturities [2]. - The bond offering attracted nearly 10 times the demand for the £1 billion ($1.37 billion) sale, with a coupon set at 120 basis points above 10-year gilts [3]. - Alphabet joins a select group of issuers of sterling-denominated century bonds, which typically attract institutional investors like pension funds [3][10]. Group 2: Market Context and Implications - The issuance reflects unprecedented levels of debt being raised in both public and private markets to support AI growth, with total tech debt issuance expected to reach around $3 trillion over the next five years [4][7]. - The bond issuance is seen as a strategic move to diversify funding sources and tap into the demand from UK insurance and pension funds, avoiding over-reliance on the USD market [8][11]. - Analysts suggest that the issuance of a 100-year bond may indicate market froth and could signal a peak in the current investment cycle, despite being a well-executed deal [6][7]. Group 3: Investor Sentiment and Risks - Investors are betting on Alphabet's ability to innovate and sustain its business model over the next century, which is a significant leap given the rarity of such long-term corporate debt [9][10]. - The bond's yield of just over 6% in a volatile political environment raises questions about the long-term viability of such investments, especially as tech companies face evolving market dynamics [11][12]. - The contrast between corporate and sovereign debt is highlighted, with corporate borrowers facing greater risks related to market performance and technological changes [12].