When Alphabet sold a 100-year bond back in February, investors were practically tripping over each other to get a piece. The order book hit roughly 10x oversubscription. Now, just months later, that same bond is trading below 90 pence on the pound for the first time.
What happened to the bond
The buyers were exactly who you’d expect for this kind of paper: pension funds and insurers. These are institutions that need to match ultra-long-duration liabilities, like pension obligations stretching out decades, with correspondingly long-duration assets.
The decline below 90 pence means that anyone who bought at par has already lost more than 10% of their principal value.
Why Alphabet needed the money
