Alphabet borrowed $25 billion. $10bn of it matures after 2045
Alphabet priced nine tranches out to a 6.500% bond due 2066. Its first-half interest expense was already up more than fivefold before any of this landed.
In short
Alphabet priced $25.0bn of notes on 6 August in nine tranches, from floating-rate paper due 2028 to a 6.500% bond maturing in 2066. Ratings are Aa2 and AA+.
- Means
- The term structure is the disclosure. $10bn matures after 2045, which is a company funding something it expects to still be paying for in twenty years.
- Market
- Alphabet paid 5.450% for ten-year money. AMD, a weaker credit, paid 5.500% eleven days later. Long money is not cheap for anyone right now, whatever the rating.
- Watch
- Fixed coupons add $1,331m a year. Alphabet's first-half interest expense was $1,811m, already up more than fivefold, and half a year of this lifts it about 37%.
Somebody at Alphabet has decided the company will still be paying for this in 2066.
On 6 August it priced $25.0 billion of notes in nine tranches. The shortest is floating-rate paper maturing in 2028. The longest is a 6.500% bond due 15 August 2066 — forty years, at a company that had almost no debt three years ago.
The nine tranches
| Maturity | Amount | Coupon | Yield | Spread |
|---|---|---|---|---|
| 2028 (floating) | $0.75B | SOFR + 0.44% | — | — |
| 2028 | $1.25B | 4.500% | 4.575% | T + 33 |
| 2029 (floating) | $0.50B | SOFR + 0.60% | — | — |
| 2029 | $2.00B | 4.625% | 4.734% | T + 43 |
| 2031 | $3.50B | 4.875% | 4.991% | T + 60 |
| 2033 | $2.50B | 5.200% | 5.275% | T + 75 |
| 2036 | $4.50B | 5.450% | 5.520% | T + 85 |
| 2046 | $3.00B | 6.250% | 6.283% | T + 105 |
| 2056 | $4.50B | 6.375% | 6.377% | T + 115 |
| 2066 | $2.50B | 6.500% | 6.527% | T + 130 |
Moody’s rates the notes Aa2; S&P rates them AA+. This is about as good as corporate credit gets, and the pricing shows it at the short end — 33 basis points over Treasuries for two-year money is close to free.
The long end is a different story. By 2066 the spread has widened to 130 basis points and the coupon is 6.500%.
Read the maturities, not the total
$25 billion is a headline. The distribution of it is the disclosure.
$10.0 billion — 40% of the offering — matures after 2045. A company borrowing for a two-year working capital need does not sell forty-year bonds. A company doing this is funding assets it expects to be running, and paying for, deep into the century.
The filings do not say what those assets are. Anyone who has read Alphabet’s cash flow statement lately can make a reasonable guess, and we are not going to make it for you in a sentence the document does not support.
What it costs
Annual coupon on the fixed-rate tranches
2028 $1,250M × 4.500% = $56.3M 2029 $2,000M × 4.625% = $92.5M 2031 $3,500M × 4.875% = $170.6M 2033 $2,500M × 5.200% = $130.0M 2036 $4,500M × 5.450% = $245.3M 2046 $3,000M × 6.250% = $187.5M 2056 $4,500M × 6.375% = $286.9M 2066 $2,500M × 6.500% = $162.5M ───────── $1,331.5M a year
Arithmetic on the eight fixed tranches from the pricing term sheet. Excludes the $1.25bn of floating-rate notes, which move with SOFR. Contractual coupon, not accounting interest expense.
The weighted average fixed coupon is 5.606%.
Now put that next to the number we published two days ago. In a panel of 1,519 listed non-financial companies, Alphabet was the single largest contributor to the rise in US corporate interest expense this year — from $295 million in the first half of 2025 to $1,811 million in the first half of 2026. That was already a 37.6-fold increase across four quarters: $34M, $261M, $533M, $1,278M.
What half a year of the new coupons does to that line
Reported, first half 2026 $1,811M Half a year of new coupons +$666M ──────── $2,477M → about 37% higher
Reported first-half interest expense plus half of the new fixed coupon. Arithmetic, not guidance — Alphabet may retire other debt, and the accounting figure differs from contractual coupon.
The comparison that should be uncomfortable
Eleven days after Alphabet priced, AMD sold $4.75 billion of notes including a 5.500% tranche due 2036.
Five basis points. That is what the market charged AMD over Alphabet for ten-year money in the same month.
We want to be careful here, because the honest version has a caveat. The two deals priced eleven days apart and Treasury yields moved in between, so the coupon gap is not a clean credit spread — Alphabet’s own spread to Treasuries was 85 basis points, and AMD’s 8-K does not disclose its spread. A proper comparison needs both spreads on the same day, and we do not have them.
What survives the caveat is smaller but still worth having: at ten years and beyond, high credit quality is not buying much. Alphabet pays 6.500% to borrow for forty years while the policy rate sits at 3.64%. Whatever the market is worried about at that horizon, an AA+ rating does not fix it.
Widen the frame past investment grade and the five basis points stop looking like the story. Three days after AMD, CoreWeave signed a secured term loan at Term SOFR plus 5.50% — roughly 9.15% — for the same kind of spending. Alphabet, AMD, Intel and CoreWeave all raised money for AI capacity within three weeks of each other, and the five instruments they used land in five different places on the financial statements.
What would make this wrong
- Coupon is not interest expense. The notes priced below par, there are underwriting discounts of 0.125% to 0.600%, and accounting interest will run above the coupon. Our $1,331.5 million is contractual.
- The $2,477 million figure is arithmetic, not guidance. It adds half a year of new coupons to a reported half-year figure and assumes nothing is retired.
- We do not know what the money is for. The prospectus uses customary language. Any link to capital spending is an inference, and the connection is not stated in the document.
- The AMD comparison is rough, for the reason given above. It is included because the raw numbers are striking, with the caveat attached rather than buried.
- A long maturity is not a warning. Locking in forty-year funding at a fixed rate can be prudent, expensive, or both, and which one it turns out to be depends on rates nobody can call.
- Ratings are the agencies’ opinions, quoted from the term sheet, not our assessment.
Check it yourself
Everything in the tranche table is on pages 2 to 5 of the pricing term sheet, linked below — amount, coupon, yield, spread, benchmark Treasury, offering price and underwriting discount for each of the nine tranches. The 8-K of 10 August records the closing. Alphabet’s quarterly interest expense is one API call.
The coupon arithmetic is in the article and can be redone in a minute.
If a figure here does not match a filing, tell us and it will be corrected on the article and on the corrections log, with the date.
Questions this answers
- How much did Alphabet borrow in August 2026?
- $25.0 billion, priced on 6 August 2026 and settled on 10 August. It comprises $23.75 billion of fixed-rate notes across eight maturities from 2028 to 2066, plus $1.25 billion of floating-rate notes due 2028 and 2029 priced at compounded SOFR plus 0.44% and 0.60%.
- What is the longest maturity in Alphabet's bond sale?
- A $2.5 billion tranche of 6.500% notes due 15 August 2066, forty years out. It priced at 99.617 for a yield of 6.527%, a spread of 130 basis points over the benchmark Treasury. Together with the 2046 and 2056 tranches, $10.0 billion of the offering matures after 2045.
- What will the new notes cost Alphabet each year?
- $1,331 million in fixed coupon interest, which is arithmetic on the eight fixed tranches rather than a forecast, plus a floating amount on $1.25 billion that moves with SOFR. The weighted average fixed coupon is 5.606%.
- How does Alphabet's pricing compare to AMD's?
- For ten-year money the coupons were almost identical: Alphabet 5.450% on its 2036 notes, AMD 5.500% on its 2036 notes eleven days later. Alphabet is rated Aa2 by Moody's and AA+ by S&P. The two deals priced on different days, so Treasury moves are part of the gap, but five basis points is a narrow reward for a large difference in credit.
- Why does Alphabet need to borrow when it is highly profitable?
- The filings do not say. What they show is that Alphabet's interest expense rose from $295 million in the first half of 2025 to $1,811 million in the first half of 2026 as it funded capital spending with debt, and that this offering adds to it. The prospectus does not state a specific use of proceeds beyond the customary language.
Verify this yourself
6 primary sourcesEvery figure on this page came from the documents below — not from summaries, databases, or other articles. Open them and check the numbers.
- Alphabet Inc. — Free writing prospectus (pricing term sheet), August 6 2026 Every tranche, coupon, yield, spread, offering price and underwriting discount quoted here OPEN ↗
- Alphabet Inc. — Form 8-K, filed August 10 2026 Items 8.01 and 9.01 · the closing of the offering OPEN ↗
- Alphabet Inc. — SEC EDGAR filing history (CIK 0001652044) The 424B5 and 424B2 prospectus supplements filed 6 and 7 August 2026 OPEN ↗
- Advanced Micro Devices — Form 8-K, filed August 17 2026 The AMD coupons used in the comparison, including 5.500% due 2036 OPEN ↗
- SEC company concept API — Alphabet, InterestExpenseNonoperating Quarterly interest expense of $34M, $261M, $533M and $1,278M across the four quarters to June 2026 OPEN ↗
- Federal Reserve Bank of St. Louis (FRED) — Federal Funds Effective Rate, series DFF The 3.64% policy rate referenced for context OPEN ↗
Data as of Aug 24, 2026 · figures may be restated by the issuer after this date
Found a number that doesn't match the filing? Confirmed corrections are published on the corrections log, with the date and what changed.
This article is for informational purposes only and is not investment advice. Figures come from public filings as of the date noted above and may be restated later. Verify independently before making any investment decision.