HONG KONG: Alphabet Inc began marketing its inaugural Hong Kong and Singapore dollar bond sale, testing investor interest at a time of increasing volatility for companies focused on artificial intelligence.
The Google parent set initial price guidance for its proposed two-year, five-year and 10-year Hong Kong dollar bonds at around 4.6%, 5% and 5.5%, respectively, according to a person familiar with the matter. The company is also marketing two-year, five-year, 10-year and 30-year Singapore dollar-denominated notes, with guidance around 2.75%, 3.25%, 3.65%, and 4%, the person said.
Proceeds from the offering will be used for general corporate purposes, which may include the repayment of outstanding debt. The bonds could be priced as early as today, the person said.
The deal comes at a challenging moment for technology industry borrowers. Investors have become more cautious toward AI-linked assets after a broad market selloff last week fuelled by concerns that a Democratic sweep in the US midterm elections could lead to greater scrutiny of data center development and AI infrastructure spending.
The sector has also been shaken by market turmoil sparked by Nvidia Corp, the leading maker of AI chips, which has been working with an outside firm to identify potential replacements for chief executive officer Jensen Huang. Alphabet’s fundraising effort is part of a broader push by global hyperscalers to tap new debt markets as they seek financing for AI-related projects. The company sold its first Australian dollar bonds in August and has also issued notes in Swiss francs, British pounds, Canadian dollars and Japanese yen this year.
Alphabet and other firms, including Microsoft Corp, Amazon.com Inc and Meta Platforms Inc, have been borrowing at a record pace while simultaneously committing tens of billions of dollars to build out AI capabilities.
Earlier this month, Alphabet raised €6 billion (RM27.19 billion) through a multi-tranche euro bond sale, its second offering in the currency this year. The company paid materially higher borrowing costs than in its inaugural euro deal in May as concerns over the pace of AI spending rose. — Bloomberg