Alphabet issued its second Eurobond this year to test market confidence in its AI investment

Alphabet launched its second Eurobond issuance this year to test investor demand. Last week's earnings report missed expectations, causing a sharp drop in stock prices and widening the yield spread of tech sector bonds. The market is concerned about the scale of AI investment impacting core business. This issuance of Eurobonds in seven tranches has maturities of 2 to 19 years, with the 2-year bond initially priced about 60 basis points above the medium-term swap rate, and the longest 19-year bond having an issuance spread of 205 to 210 basis points above the medium-term swap rate.