Companies are looking to sell the most high-grade bonds in one day since March, with 15 corporations including Alphabet Inc. preparing blue-chip note sales on Monday, a sign that debt markets are stabilizing after the turmoil brought by tariff announcements early this month.
Alphabet, the parent company of Google, is offering about US$4 billion of U.S. high-grade corporate bonds on Monday, according to people with knowledge of the matter. The sale marks Alphabet’s first since 2020 when it sold $10 billion of notes. It’s separately planning to sell its first bonds in Europe as soon as Tuesday.
Other companies including Procter & Gamble Co., the maker of Crest toothpaste and Dawn dishwashing liquid, and D.R. Horton Inc., the homebuilder, are also teeing up sales, according to people with knowledge of the matter. The 15 offerings that are lined up for Monday would be the most in the U.S. high-grade market by the number of issuers since March 24, when 16 companies sold debt, according to data compiled by Bloomberg News.
Average high-grade corporate bond yields surged in early April days after U.S. President Donald Trump announced the steepest tariffs on U.S. trading partners in more than a century, climbing to 5.55 per cent on April 11 from 5.06 per cent on April 3. But yields have since drifted lower, averaging 5.21 per cent on Friday, as the U.S. signaled its willingness to negotiate deals, and that discussions may take years. Risk premiums are similarly stabilizing.
Alphabet Leading
This week dealers are anticipating around $35 billion of sales in the U.S. high-grade market. That’s a marked jump from the roughly $25 billion sold last week, and the $6 billion sold the week Trump announced the tariffs.
Alphabet is looking to sell debt in as many as four parts, one of the people said. The longest portion of the sale, a 40-year bond, may yield between 1 percentage point and 1.05 percentage point more than Treasuries, said the person, who asked not to be identified as the details are private.
The search engine company had more than $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. It may signal bigger future share buybacks and investments in artificial intelligence, they added.
“We anticipate peers could follow,” the strategists wrote.
Representatives for Mountain View, California-based Alphabet weren’t immediately available to comment outside of normal business hours on the West Coast of the U.S.
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 the sale, who asked not to be identified because the information is private.
A 29-year bond in euros would be the second-longest corporate bond sold in Europe this year, behind only Johnson & Johnson’s €1 billion ($1.13 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 has all but fallen by the wayside since then, given the surge in global market volatility. --With assistance from Caleb Mutua.
Josyana Joshua and Hannah Benjamin-Cook, Bloomberg News
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