Google parent Alphabet is raising about US$3.8 billion (HK$29.6 billion) through its first Hong Kong and Singapore dollar bond offerings, according to term sheets seen by Reuters on Thursday, above its initial target following strong demand.
The seven-part sale comes after Alphabet drew combined orders of more than US$7 billion for the two offerings. It is selling HK$16 billion (US$2 billion) worth of Hong Kong dollar bonds and S$2.28 billion (HK$13.91 billion) in Singapore dollar bonds.
The company had targeted US$3 billion from the combined bond sales, Reuters reported on Wednesday, and was considering minimum sizes of HK$8 billion for the Hong Kong dollar portion and S$1.5 billion for the Singapore dollar portion.
Strong demand, however, allowed Alphabet, which is accelerating investment in AI infrastructure, to increase the size of the combined offering, even as recent volatility in technology shares has made investors more selective.
Alphabet plans to use the proceeds for general corporate purposes, which may include repaying debt, according to the term sheets.
BOND SALES FOLLOW RECENT EURO, USD AND AUD ISSUANCES
The company priced HK$7.5 billion of 2-year Hong Kong dollar bonds at a 4.35 percent reoffer yield, HK$7 billion of 5-year bonds at 4.70 percent, and HK$1.5 billion of 10-year bonds at 5.20 percent.
It also priced S$370 million of 2-year Singapore dollar bonds at 2.50 percent, S$900 million of 5-year bonds at 3.00 percent, S$330 million of 10-year bonds at 3.40 percent and S$680 million of 30-year bonds at 3.80 percent.
The reoffer yields were tighter than initial guidance of 4.60 percent, 5.00 percent and 5.50 percent for the Hong Kong dollar bonds, and 2.75 percent, 3.25 percent, 3.65 percent and 4.00 percent for the Singapore dollar bonds.
Earlier, the Hong Kong dollar deal drew orders exceeding HK$32.5 billion, while the Singapore dollar sale drew more than S$4 billion in orders, according to deal statistics seen by Reuters.
HSBC (0005) and JPMorgan are joint global coordinators. For the Hong Kong dollar bonds, Bank of China (Hong Kong) (2388), ICBC (1398), and Standard Chartered (2888) are arranging the sale. DBS, OCBC, and United Overseas Bank are arranging the Singapore dollar bond sale.
The bonds, which are due to settle on November 19 and are expected to be rated Aa2 by Moody's and AA+ by S&P, would help expand and diversify Alphabet’s geographic debt footprint.
The sales add Hong Kong and Singapore dollar funding to Alphabet's recent issuances.
Alphabet last week raised €6 billion (HK$52.14 billion) through a euro-denominated bond sale. It also sold US$25 billion of US dollar bonds in August and A$5.5 billion (HK$29.42 billion) of Australian dollar bonds in the same month.
Reuters
