Alphabet has raised 576.5 billion yen ($3.6 billion) through its first-ever yen-denominated bond sale, marking the largest bond issuance in Japanese currency by a foreign company, according to a term sheet released on Friday.
The transaction comes as the parent company of Google continues to expand investments in artificial intelligence infrastructure while diversifying its global funding sources.
The company joins a growing list of technology firms turning to international debt markets to support heavy capital spending linked to AI development and cloud infrastructure expansion.
Alphabet enters Japanese debt market
The yen-denominated debt issuance is Alphabet’s first in the Japanese market.
The company has previously issued bonds in euros, sterling, Canadian dollars, and Swiss francs as part of its broader funding strategy.
Alphabet has flagged capital expenditure of as much as $190 billion this year as it accelerates investment in AI-related infrastructure and services.
According to the term sheet, the company issued bonds with maturities ranging across 3, 5, 7, 10, 15, 30, and 40 years.
Coupons on the bonds ranged between 1.965% and 4.599%.
Mizuho Securities, Bank of America, and Morgan Stanley acted as joint bookrunners for the transaction.
Investor demand exceeds previous record
Demand for the offering was strong among both domestic and international investors, according to Mizuho Securities, one of the underwriters involved in the deal.
The issuance surpassed the previous record for a foreign company’s yen-denominated bond sale, which was set in 2019 by Berkshire Hathaway.
The Warren Buffett-led conglomerate had issued 430 billion yen in bonds at the time.
The strong response to Alphabet’s sale reflects continued investor appetite for high-quality corporate debt despite ongoing uncertainty surrounding global interest rates and economic growth.
Earnings beat expectations
The bond sale comes shortly after Alphabet reported stronger-than-expected quarterly earnings.
The company posted earnings per share of $5.11, well above Wall Street expectations of $2.63.
The figure was also higher than the $2.81 reported during the same period a year earlier.
Quarterly revenue reached $110 billion, surpassing analyst forecasts of $107 billion and representing a 22% increase year-on-year.
A major contributor to the performance was the company’s cloud business.
Google Cloud drives growth
Meanwhile, Google Cloud revenue rose 63% to $20 billion during the quarter.
The segment also reported a 33% operating profit margin, reflecting improved profitability even as depreciation costs linked to infrastructure investments continued to rise.
Chief executive Sundar Pichai said growing enterprise demand for AI services was a key factor behind the cloud division’s performance.
According to Pichai, enterprise AI offerings led growth in the cloud business for the first time, with sales increasing eightfold from a year earlier.
The company’s cloud backlog nearly doubled to between $460 billion and $462 billion, signalling sustained demand momentum from customers.
However, Pichai also acknowledged supply limitations affecting the business.
“Our cloud revenue would have been higher if we were able to meet the demand,” he said.
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