The Brief:
Alphabet raised $5.5bn in its debut Australian bond, the largest corporate bond issue in Aussie history outside the banking sector and governments.
Allens acted for the bank syndicate, while Mallesons is reportedly advising Alphabet on the record Kangaroo bond.
Alphabet, the parent of Google, has pulled off the biggest corporate bond raise in Australian history outside the banking sector and governments, with a $5.5bn Kangaroo bond debut.
The deal marks Alphabet’s first foray into the Australian dollar bond market, with proceeds earmarked for its build-out of AI data centres.
The deal
Alphabet had initially flagged raising between $4bn and $5bn, but demand was so strong it drew more than $18bn in orders, letting it cap the deal at $5.5bn.
More than 200 investors took part, with Australian buyers snapping up around 60% of the deal, Asia taking 20% and the rest split across Europe and elsewhere.
The raise eclipses Apple’s $2.25bn offering from 2015, the previous record for a corporate bond sale in Australia. It also lands amid a wider boom in foreign borrowers tapping the local market, with a record $60bn worth of Kangaroo bonds sold so far this year, turning Australia into the third-largest bond market globally behind the US and Europe.
Fund managers expect the deal to open the door for rivals. Chamath De Silva, head of fixed income at Betashares, said he expects Amazon to be the next major tech company to tap the Australian bond market. Meanwhile, Helen Mason, head of Australian credit at Schroders, said: “I would expect to see another hyperscaler deal before the end of this year.”
Who’s acting
Mallesons is reportedly advising Alphabet on its first Australian bond issue. The firm declined to comment on its role.
Allens acted for the four banks managing the deal – ANZ, Deutsche Bank, RBC Capital Markets and TD Securities – with the team led by James Darcy and Ugo Ba.