(Aug19): Alphabet Inc paid just under 7% to borrow longer-dated funds in its debut Australian dollar bond offering, its highest-ever for a note, underscoring how broader demands for cash among hyperscalers around the world are feeding into more costly funding almost everywhere.

The US tech giant sold A$5.5 billion of debt Wednesday in a multi-part deal, with the yield on the 20-year tranche, the longest part, set at 6.98%, according to an email from Australia & New Zealand Banking Group, one of the banks leading the sale. The deal attracted demand in excess of A$18 billion, the bank said.

The elevated borrowing costs for even Alphabet are more a reflection of the multi-decade high yields seen around the world this week than of the creditworthiness of Google’s parent company, which has S&P Global Ratings’ second-highest credit score. Rekindled inflation and a glut of fundraising by both governments and large tech firms, in general, are stoking concern about the capacity of investors to absorb the debt and pushing up the cost of doing so.

Still, the hundreds of billions of dollars being raised by Big Tech this year to finance their AI ambitions is fanning concerns that such fundraising, possibly in its early innings, will syphon away demand from government debt, exacerbating fiscal concerns. Alphabet trails only Amazon.com Inc so far in 2026 among large US corporates in tapping global debt markets across currencies.

“Investors recognised they were being offered an attractive entry point into one of the world’s strongest corporate balance sheets,” said Chamath De Silva, head of fixed income at Betashares. He expects Amazon to be the next hyperscaler to tap the Australian market.

Corporate debt typically is priced over government debt or benchmarks heavily influenced by movements in rates, which means that companies generally end up paying more to borrow too when sovereigns do. Yields on 30-year US Treasuries rose to the highest since 2007 this week while French and German borrowing costs also hit multi-year highs.

Alphabet paid a spread of 180 basis points over the local benchmark to borrow A$1 billion for 20 years in the deal, according to ANZ. The single largest tranche was a A$1.5 billion floating-rate note that also attracted the most orders, the bank said.

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