Alphabet Looks to Support Black Community With Cheap New Bonds

(Bloomberg) -- Alphabet Inc. is proposing to tap the bond market at rock bottom yields, in a rare debt sale that will help combat racial inequality, among other sustainability projects.The parent company of Google is looking to fund organizations that support Black entrepreneurs, small and medium businesses impacted by Covid-19, as well as affordable housing, among other eligible proceeds listed in bond documents seen by Bloomberg. The borrowings can also be used to finance clean energy projects and green buildings.Alphabet has only borrowed in the U.S. investment-grade market a handful of times, with the last issue four years ago. It was cheap to sell bonds then, and could be even more of a steal now -- the company may pay just 40 basis points over Treasuries to borrow for five years, according to a person with knowledge of the matter. Amazon.com Inc. initially marketed a similar range for a debt offering in June, which ended up pricing at a spread of 25 basis points, setting a record-low coupon in the process.Google has prioritized supporting the Black community, recently announcing a $175 million “economic opportunity package” to invest in Black-led venture capital firms and startups, training for Black job seekers and grants for small businesses. It also said it will hire more Black workers in senior roles and establish internal anti-racism programs for all employees, according to a June blog post.Read more: Google, Facebook Diversity Pledges Follow Scant Progress on RaceAlphabet may sell the debt in six parts, according to the person with knowledge of the matter. The longest security, a 40-year bond, may yield between 1.25 and 1.3 percentage points above Treasuries, the person said, asking not to be identified as the details are private.The bond sale comes as sustainable debt issuance has skyrocketed in the pandemic, most notably via social bond sales. Supply will almost double this year compared to last as more borrowers raise debt to respond to the humanitarian crisis presented by Covid-19, according to HSBC Holdings Plc.In addition to the sustainability-linked proceeds, the bond sale will also support green projects. Google has been expanding its use of sustainable energy, touting its carbon-neutral status for over a decade. It’s one of the world’s largest corporate buyers of renewable power.(Updates with use of bond proceeds from the second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P. Read More...

(Bloomberg) — Alphabet Inc. is proposing to tap the bond market at rock bottom yields, in a rare debt sale that will help combat racial inequality, among other sustainability projects.

The parent company of Google is looking to fund organizations that support Black entrepreneurs, small and medium businesses impacted by Covid-19, as well as affordable housing, among other eligible proceeds listed in bond documents seen by Bloomberg. The borrowings can also be used to finance clean energy projects and green buildings.

Alphabet has only borrowed in the U.S. investment-grade market a handful of times, with the last issue four years ago. It was cheap to sell bonds then, and could be even more of a steal now — the company may pay just 40 basis points over Treasuries to borrow for five years, according to a person with knowledge of the matter. Amazon.com Inc. initially marketed a similar range for a debt offering in June, which ended up pricing at a spread of 25 basis points, setting a record-low coupon in the process.

Google has prioritized supporting the Black community, recently announcing a $175 million “economic opportunity package” to invest in Black-led venture capital firms and startups, training for Black job seekers and grants for small businesses. It also said it will hire more Black workers in senior roles and establish internal anti-racism programs for all employees, according to a June blog post.

Read more: Google, Facebook Diversity Pledges Follow Scant Progress on Race

Alphabet may sell the debt in six parts, according to the person with knowledge of the matter. The longest security, a 40-year bond, may yield between 1.25 and 1.3 percentage points above Treasuries, the person said, asking not to be identified as the details are private.

The bond sale comes as sustainable debt issuance has skyrocketed in the pandemic, most notably via social bond sales. Supply will almost double this year compared to last as more borrowers raise debt to respond to the humanitarian crisis presented by Covid-19, according to HSBC Holdings Plc.

In addition to the sustainability-linked proceeds, the bond sale will also support green projects. Google has been expanding its use of sustainable energy, touting its carbon-neutral status for over a decade. It’s one of the world’s largest corporate buyers of renewable power.

(Updates with use of bond proceeds from the second paragraph)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For more articles like this, please visit us at bloomberg.com” data-reactid=”28″>For more articles like this, please visit us at bloomberg.com

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Subscribe now to stay ahead with the most trusted business news source.” data-reactid=”29″>Subscribe now to stay ahead with the most trusted business news source.