Alphabet (GOOGL.US) issued Eurobonds for the second time in the year: Under concerns about AI burning money, the initial spread guide for 19-year bonds reached 210 basis points

The Zhitong Finance App noticed that Alphabet (GOOGL.US) issued Eurobonds for the second time this year, which is a test of investors' demand. In previous weeks, pressure on technology bonds had already widened borrowing spreads across the sector.

People familiar with the matter revealed that Google's parent company has launched a seven-batch release covering a period of 2 to 19 years. The initial price guide for the two-year fixed-rate batch was about 60 basis points of increase in the intermediate swap rate, while the price for 19-year bonds was about 205 to 210 basis points of increase in the intermediate swap rate.

Prior to this launch, Alphabet's disappointing performance last week heightened market concerns about the scale of AI spending and pushed interest spreads on technology bonds to widen. On Friday, the protection contract against Alphabet's debt default jumped 6.4 basis points, setting the record for the biggest increase in absolute value in a single day and hitting a record high of nearly 91 basis points.

The day before, due to disappointing search and ad sales, the company's stock price experienced its biggest one-day decline in record, fueling market concerns that AI is threatening its core business.

Despite weak demand and broadening pricing for recent offerings, tech companies are expected to continue to borrow heavily to fund AI investments. Alphabet maintains a capital expenditure forecast of up to 205 billion US dollars this year.

Alphabet raised 9 billion euros (about 10 billion US dollars) through six batches in May of this year. Barclays, BNP Paribas, and Deutsche Bank are scheduling Monday's release, and pricing is expected later in the day.