Companies including Alphabet sold more than US$18 billion ($23.57 billion) of high-grade bonds on Monday, the most in one day since March, the latest sign that debt markets are stabilising after the turmoil brought by tariff announcements early this month.
Alphabet, the parent company of Google, sold US$5 billion of notes. The company's last note sale occurred in 2020, when it raised US$10 billion. It's separately planning to sell its first bonds in Europe as soon as Tuesday.
Other companies including Procter & Gamble and homebuilder D.R. Horton also sold notes. The deals spanned across 15 companies, and the total money raised was the most since March 24's US$24.15 billion, according to data compiled by Bloomberg.
Average high-grade corporate bond yields surged in early April days after US President Donald Trump announced the steepest tariffs on US trading partners in more than a century, climbing to 5.55% on April 11 from 5.06% on April 3. But they've steadily declined the past two weeks, averaging 5.21% on Friday, as the US signaled its willingness to negotiate trade deals. Risk premiums are similarly stabilizing.
Alphabet leading
This week dealers are anticipating around US$35 billion of sales in the US high-grade market. That compares with the roughly US$25 billion sold last week and the US$6 billion that priced the week that included April 2, when Trump announced the harshest tariffs in more than a century, a plan that was later delayed. With today's haul, investment-grade new sales are already over half way to the weekly expected total.
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Alphabet priced US$5 billion in debt in four parts, with the longest portion of the sale, a US$1.5 billion 40-year bond, yielding 70 basis points more than Treasuries, versus initial price talk of as much as 105 basis points.
The company had more than US$95 billion of cash and marketable securities on its books as of March 31, according to data compiled by Bloomberg. But selling bonds can reduce its cost of capital, according to a note from Bloomberg Intelligence's Robert Schiffman and Alex Reid. The sale may signal bigger future share buybacks and investments in artificial intelligence, they added.
"We anticipate peers could follow," the strategists wrote.
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Representatives for Mountain View, California-based Alphabet didn't respond to requests for comment on Monday.
European sale
Alphabet's euro denominated sale may come in as many as five parts with maturities as far out as 29 years, according to a person with knowledge of that sale. The only longer-tenored bond sold in Europe this year by a non-financial company was Johnson & Johnson's EUR1 billion ($1.49 billion) 30-year tranche priced in February as part of a five-part transaction, data compiled by Bloomberg show.
Issuance of long-dated corporate debt all but fell by the wayside in Europe since then, given the surge in global market volatility.
