Google 100-year bond: Google’s parent company, Alphabet Inc., recently made headlines by issuing an ambitious 100-year bond. This move by Alphabet Inc. is aimed at raising funds for the company’s AI ambitions. An offer with a 100-year lock-in is seen as an investment for the next generation, as the investor might not be alive to receive the return on their money after 100 years. Another risk is the company’s survival and dominance over the next century.
Today, Alphabet’s 100-year bond yield is 6.125%, which may rise in future bond offerings as bond prices and yields move in opposite directions. Therefore, Alphabet’s decision to issue a rare 100-year sterling bond as part of its nearly $32 billion multi-currency fundraise has ignited debate across global markets. Is this a signal of stress — or a bold assertion of financial strength?
Alphabet 100-year bond: Debt for Survival vs Debt for Scale
Whether Google’s 100-year bond is a debt for survival or debt for scale, Ponmudi R, CEO at Enrich Money, said, “There is a clear distinction between companies that borrow to survive and those that borrow to reinforce structural advantage. Alphabet firmly belongs to the latter category. The century bond reportedly attracted demand nearly ten times the issue size — a level of oversubscription that speaks volumes. Credit markets do not extend 100-year capital to companies they question.”
The Enrich Money expert said that bond investors underwrite durability, not quarterly earnings volatility. Their participation reflects confidence in Alphabet’s long-term cash flow visibility and balance sheet strength. He said that Alphabet is not raising capital to fund incremental innovation; it is investing in AI infrastructure at an industrial scale — spanning data centres, advanced chips, compute clusters, cloud expansion and model training capabilities.
Alphabet’s 100-year bond: Why 100-year lock-in?
On why a company like Alphabet Inc., which owns brands like Google, came with a 100-year lock-in offer, Ponmudi R of Enrich Money said, “When a company has confidence that its relevance will endure across economic cycles, securing 100-year capital is a rational capital-allocation decision. This is not a balance-sheet stretch. Alphabet continues to generate substantial operating cash flow from its core search and advertising franchise, and even after this issuance, leverage remains conservative relative to its free cash flow capacity.”
The Enrich Money CEO said that issuing ultra-long-duration debt serves three clear strategic objectives of Google parent Alphabet Inc., which are as follows:
1] Locking in funding costs for decades.
2] Diversifying currency exposure.
3] Insulating the balance sheet against future rate cycles.
Alphabet’s 100-year bond: Is it worth investing?
Whether Google’s 100-year bond offer is worth investing, Amit Goel, Chief Global Strategist at PACE 360, said, “Remember, it is an investment, which is a 100-year lock-in. This means you are investing for your next generation, as the chances of your survival are unlikely when this Alphabet’s 100-year bond matures. Most importantly, new bond prices and existing bonds’ yields move in opposite directions, which means the upcoming long-term bonds of Google parent Alphabet would have higher yields. So, you may be a smart investor, but you can’t guarantee that your next generation will be one too. Comparing the current bond offer with upcoming bond offers of the company, the next generation may decide a pre-mature redemption, even at a lower premium to find a buyer for one’s exit.”
The PACE 360 expert said that a corporate bond is directly linked to a company’s face value. Advising investors to look at Motorola, which offered a 100-year bond in 1997. The then-telecom giant raised $300 million from its 100-year bond, offering a 5.22% annual yield. Today, Motorola’s bonds trade at a yield of about 6% per annum. However, given Motorola’s prominence in the American market, it was a top-25 American company when this 100-year bond was launched in 1997. Today, Motorola ranks 232nd.
Remember, sometimes the company that issues a 100-year bond goes bankrupt before the bonds mature. The American retail chain company JCPenney’s 100-year bond is a glaring example. It issued a $500 million century bond in 1997 and went bankrupt just 23 years later. Sure, bondholders do get paid before equity shareholders in the event of a shutdown, but it’s still a serious risk.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
