Google Comes to Asia: Alphabet's Debut HKD and SGD Bonds Could Yield Up to 5.5%

Table 1: SGD Bonds on Offer

Table 2: HKD Bonds on Offer

Alphabet Inc. (Alphabet) has launched its first SGD and HKD bond offerings, with seven tranches in total (see Tables 1 and 2 above). Both the SGD and HKD notes are senior unsecured. Proceeds from both offerings are for general corporate purposes, which may include repaying debt. Pricing is expected on 12 November 2026, with settlement on 19 November 2026 for both currencies. The minimum denomination is S$250,000 for the SGD notes and HK$1,000,000 for the HKD notes. The SGD 5-year, 10-year and 30-year tranches can be called at par one, three and six months before maturity.

• Alphabet's 3QFY2026 revenue rose 24.7% YoY to USD127.6 billion. Group operating income rose 29.9% YoY to USD40.6 billion, and the operating margin widened to 31.8% from 30.5%. Google Services remains the main profit source, with operating income up 16.8% YoY to USD39.2 billion, or 96.5% of the group total. Google Cloud is the growth driver, as revenue rose 102.6% YoY to USD30.7 billion and operating income more than tripled to USD11.1 billion.

• AI spending is now outpacing cash generation. Capital expenditure (capex) of USD51.4 billion exceeded operating cash flow of USD42.3 billion in 3QFY2026, the second consecutive quarter this has happened. Trailing twelve-month (TTM) free cash flow fell 73.2% YoY to USD19.7 billion. Full-year 2026 capex guidance is unchanged at USD195.0 to USD205.0 billion, and management expects a significant increase in 2027. We therefore expect Alphabet to keep issuing new debt moving forward.

• Total debt, including lease liabilities, more than doubled to USD150.3 billion from USD67.0 billion at end-2025. This deal follows a €6bn euro bond sale on 2 November 2026 and will add to that total. Even so, leverage remains low. Total debt-to-TTM EBITDA stood at 0.81x (3QFY2025: 0.31x). Interest coverage (TTM operating income / TTM interest expense) remains robust at 51.0x (3QFY2025: 252.7x). While both metrics have softened, they remain very healthy.

• Alphabet has diversified its funding sources to support its substantial AI capital expenditure. In 9M2026, the company raised approximately USD143 billion through debt and equity financing, comprising USD81 billion of debt and USD62 billion of equity, including USD19 billion of mandatory convertible preferred shares. The equity component helps limit additional leverage and provides a cushion for bondholders, although the preferred shares carry dividend obligations. Nevertheless, the scale of debt issuance highlights Alphabet's growing financing requirements as AI investments accelerate.

• Liquidity is ample. Alphabet held USD189.9 billion of cash and marketable securities, which excludes its USD75.2 billion SpaceX stake as that is subject to short-term sale restrictions. This leaves a net cash position of USD39.6 billion. Near-term debt maturities remain small. Only about USD1.0 billion of its USD127.5 billion of long-term debt is due within the next 12 months.

• For the SGD tranches, we compare against Singapore Government Securities (SGS) first. At IPG, the 2-year offers a pickup of 82bps over the 2-year SGS (1.93%), the 5-year 124bps (2.01%), the 10-year 144bps (2.21%) and the 30-year 172bps (2.28%). Against peers, the 2-year at 2.75% is 24bps above the A3-rated AREIT 3.468% 2029 (2.51%). The 5-year at 3.25% 49bps above the CAPITA 2.464%2031 (2.76%), which matures about two months earlier and is rated five notches lower at A-. The 10-year at 3.65% is 86bps above the PSA 2.230% 2035 (2.79%). The 30-year at 4.00% is 97bps above the SP Group 2.950% 2056 (3.03%).

• For the HKD tranches, the pickup over Hong Kong government bonds is about 123bps for the 2-year (3.37%), 135bps for the 5-year (3.65%) and 170bps for the 10-year (3.80%). Against peers, the 2-year at 4.60% is 77bps above the HKAA 2.900% 2029 (3.83%). The 5-year at 5.00% is 102bps above the HKAA 2.970% 2031 (3.98%) and 104bps above the MTRC 2.880% 2031 (3.96%), both rated AA+ by S&P like Alphabet. It is also 73bps above the HKE 3.300% 2031 (4.27%), which is rated A-. The 10-year at 5.50% is 125bps above the HKAA 3.380% 2036 (4.25%) and 121bps above the MTRC 3.300% 2036 (4.29%).

• Backed by its dominant Google Services franchise, fast-growing Cloud profits and a net cash position, Alphabet's credit profile remains strong. At IPG, we find both the SGD and HKD tranches attractively priced, as they yield more than local peers with similar or lower ratings. The 5-year tranches stand out. The SGD 5-year at 3.25% yields 49bps more than the A- rated CAPITA 2031 at almost the same maturity. The HKD 5-year at 5.00% yields over 100bps more than MTRC and HKAA bonds with the same AA+ rating from S&P. Both do so with less interest rate risk than the 10-year (HKD) and 30-year (SGD) tranches.

• We expect final pricing to tighten from IPG, but there is room for it to do so and still leave a pickup. Investors should stay mindful that capex-led borrowing is pushing leverage higher and free cash flow negative.

Table 3: SGD Bond Comparison

Table 4: HKD Bond Comparison