Alphabet’s century bond yields nearly 7% — but is it useful for investors in Belgium?

The century note formed one part of a five-tranche sterling transaction covering maturities from 2029 to 2126. Alphabet simultaneously raised $20 billion in the United States

Place

United States

Home country of Alphabet and jurisdiction of its SEC filings.

Why it matters

Home country of Alphabet and jurisdiction of its SEC filings.

About

The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic consisting of 50 states and a federal capital district, Washington, D.C. The 48 contiguous states border Canada to the north and Mexico to the south, with the semi-exclave of Alaska in the northwest and the archipelago of Hawaii in the Pacific Ocean.

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Alphabet’s SEC prospectus says the sterling proceeds were intended for general corporate purposes, potentially including repayment of existing debt. It does not earmark the century tranche specifically for AI. The financing nevertheless followed Alphabet’s announcement of planned 2026 capital expenditure of $175 billion to $185 billion, mainly as the company expands data-centre and computing capacity.

This is what the end of cheap money looks like for even the strongest technology borrowers. Alphabet can still borrow on unusually favourable credit terms: the century note was rated Aa2 by Moody’s and AA+ by S&P at issuance, according to the deal documentation reported in fixed-income market data. But investors now demand substantial nominal income to lock money away for extreme periods. That tells us more about prevailing long-term rates and inflation uncertainty than about imminent trouble at Google’s parent company.

Demand was strong. The century tranche priced at 99.732% of face value and 120 basis points above its reference UK government bond, while contemporaneous market data showed the order book was heavily oversubscribed. Investors were effectively expressing confidence that Alphabet, or a successor legally responsible for its debt, could remain solvent across several generations.

A bond is a loan, not an ownership stake. Bondholders normally receive their coupon and rank ahead of shareholders if an issuer fails, but they do not participate directly in Alphabet’s growth. The notes are senior unsecured obligations of Alphabet itself and are structurally behind liabilities held inside its subsidiaries, the prospectus states.

The century maturity makes the price exceptionally sensitive to interest rates. If long-term market yields rise, an existing bond paying 6.125% becomes less attractive and its price can fall sharply. At 100 years, waiting for repayment is not a realistic personal exit plan. Even a young buyer must assume that the holding will eventually be sold in the secondary market, where liquidity and price are uncertain.

There is also a technology risk hidden inside the impressive credit rating. A century ago, today’s dominant digital businesses did not exist. Alphabet’s advertising engine is enormously profitable, but no investor can know which computing platforms, regulations or competitors will shape 2126. The comparison often cited by market historians is Motorola, the last technology company to issue century debt during the 1990s. Its business was later broken up and transformed, although that history does not by itself predict Alphabet’s fate.

First, look at the currency. The bond pays its coupon and principal in pounds sterling. Belgium’s financial-education portal Wikifin warns that exchange-rate movements can raise or erase the euro return from a foreign-currency bond. A 6.87% sterling yield is therefore not a 6.87% euro yield. Hedging the currency adds cost and complexity.

Second, check whether the product is realistically accessible. Alphabet issued the notes in minimum denominations of £100,000, with additional multiples of £1,000, according to the prospectus. A broker may display smaller tradable amounts through the secondary market, but investors should confirm the legal denomination, custody structure, bid-ask spread and minimum order before assuming they can buy a modest position. The notes are held electronically through Clearstream and Brussels-based Euroclear.

Third, calculate the return after Belgian tax and charges. FPS Finance says most interest received by Belgian residents is subject to Belgian movable withholding tax — roerende voorheffing in Dutch and précompte mobilier in French. A Belgian bank will generally withhold the applicable tax, while interest received directly through a foreign intermediary may need to be declared by the taxpayer. Because rules and individual residence status can change, investors should check the current treatment through MyMinfin or ask a Belgian tax adviser before trading.

A resident using a foreign securities account must also declare that account to both the Central Point of Contact at the National Bank of Belgium and in the annual Belgian tax return, FPS Finance explains. If a foreign broker does not handle the Belgian stock-exchange transaction tax

Before buying, a resident should therefore ask the bank or broker for four figures: the clean purchase price, accrued interest, total transaction and custody costs, and the projected euro return after tax and an assumed sterling movement. Wikifin, available in Dutch and French, also recommends checking issuer quality, remaining maturity and whether the quoted figure is the coupon or the actuarial yield.

For Alphabet, century debt locks in long-term financing without issuing shares. For institutional investors such as pension funds and insurers, its long cash flows may help match distant liabilities. For households, the same structure creates risks that are difficult to manage and a maturity that bears little relationship to ordinary financial planning.

The broader story is Big Tech’s transition from cash-rich disruptor to infrastructure builder. AI requires chips, power, cooling systems, fibre and data centres on an industrial scale. Debt markets are being asked to fund that expansion before its eventual returns are known. Investors now have two questions to follow: whether Alphabet converts record capital spending into durable AI revenue, and whether rising long-term rates push the century bond’s market price still lower. A yield close to 7% may look generous, but it is compensation for a century of uncertainty — not free money.