Google "borrowing another hundred years from the sky"! The global tech industry will usher in the first "century bond" of this century

As part of a massive debt issuance plan, Google’s parent company Alphabet has announced plans to issue an extremely rare 100-year bond, marking the first time since the late 1990s that a global tech company has sold such ultra-long-term debt.

According to sources familiar with the matter, this 100-year bond will be denominated in GBP, and there will also be bonds with four other maturities in the same currency. The source added that this will be Alphabet’s first issuance of GBP bonds, with pricing possibly as early as Tuesday.

According to industry-compiled data, this is the first time since Motorola issued such bonds in 1997 that a tech company has issued bonds with such an ultra-long maturity.

Currently, the 100-year bond market is mainly dominated by governments and institutions like universities. For corporations, potential acquisitions, outdated business models, and technological obsolescence make such transactions extremely rare. However, given the massive financing needs of global tech companies to maintain their leadership in artificial intelligence development, even these rare transactions are making a comeback.

KBRA Europe macro strategist Gordon Kerr said, “They (Google) want to tap into every potential investor, from structured finance investors to ultra-long-term investors.” He pointed out that the main buyers of 100-year bonds will be insurance companies and pension funds, and “those underwriting this deal might not even be around when the debt is repaid.”

Why was the GBP chosen for the 100-year bond issuance?

Currently, strong demand from UK pension funds and insurance companies is making the GBP market the preferred venue for issuers seeking long-term financing.

However, industry statistics show that, aside from government issuers, only France’s EDF, the University of Oxford, and the Wellcome Trust have previously issued 100-year bonds in GBP.

All of these bonds were issued in 2021. According to industry indices, that year saw the lowest yields ever for high-grade GBP bonds. Due to their extremely long duration, all these bonds are trading well below their face value.

Based on industry-compiled data, among these three transactions, the Wellcome Trust bonds with the lowest coupon are currently trading at 44.6 pence per pound face value.

At the same time, not all ultra-long bonds survive. For example, struggling retailer J.C. Penney filed for bankruptcy in 2020, just 23 years after issuing its 100-year bonds.

For companies, potential acquisitions, outdated business models, and technological obsolescence make such transactions very rare. In fact, even Motorola, the tech company that last issued 100-year bonds in 1997, was likely experiencing its “final glory” as an industry leader that year.

In early 1997, Motorola was among the top 25 companies in the US by market value and revenue. Since then, this has not happened again. In 1997, Motorola was the top brand in the US, surpassing Microsoft. But by 1998, Motorola had been overtaken by Nokia in mobile phones, and after the iPhone was launched, even Nokia quickly faded from consumers’ view. Today, Motorola ranks 232nd in market value, with annual sales of only about $11 billion.

Regardless, issuing 100-year bonds remains a rare feat. KBRA analyst Kerr said, “It’s hard to say whether such bonds will become normal, even in the sovereign debt market, where they are also uncommon.”

Tech Giants Launch Debt Frenzy

The GBP 100-year bonds issued by Alphabet will be synchronized with several bond issuances in the USD market. This US tech giant plans to raise $20 billion through its USD bonds on Monday, exceeding the initial estimate of $15 billion. According to another source, the company also plans to issue its first Swiss franc bonds.

Alphabet’s last entry into the US bond market was in November last year, when it issued bonds worth $17.5 billion, attracting about $90 billion in orders. According to Bloomberg data, the 50-year bonds issued in that deal were the longest maturity among tech corporate bonds denominated in USD last year, and performed well in the secondary market. The company also issued €6.5 billion (about $7.7 billion) in bonds in Europe at that time.

This massive debt financing comes just a week after Alphabet announced that its capital expenditure for this year will reach $185 billion (doubling last year’s amount) to support AI initiatives.

Other tech companies, including Meta and Microsoft, have also announced large-scale spending plans for 2026. On Monday, Google’s bond issuance plan closely followed Oracle’s disclosure on February 2 of a $25 billion bond offering. As AI companies race to expand data center infrastructure and processor demand, their spending and borrowing scales are growing rapidly.

Barclays analysts’ January report projected that US corporate bond issuance will total $2.46 trillion this year, an 11.8% increase over 2025.

Morgan Stanley estimates that cloud giants known as Hyperscalers will increase their borrowing from $165 billion in 2025 to $400 billion in 2026. They believe that AI-related bond issuance will drive total bond issuance to as high as $2.3 trillion this year.

While Oracle and Alphabet’s early 2026 bond issuances are not surprising, they are highly significant — a corporate bond fund manager noted that “this is one of the largest capital expenditures our generation has ever experienced.”

(Source: Caixin)