According to people familiar with the matter, Alibaba Group Holding Ltd wants to sell as much as $ 8 billion in bonds next week.
The e-commerce giant aims to raise at least $ 5 billion, but may depend on the receipt and more, say the people who are not authorized to speak in public and have asked not to be identified. The agreement is a multi-tranche offer, with specific tenors yet to be determined, they said. Alibaba declined to comment. Reuters had earlier reported the planned sale.
Stopping the sale at a time when Jack Ma’s empire is under pressure from the government at home is a sign of global investor confidence in the company. In recent months, officials Ant Group Co. blocked $ 35 billion IPO, proposed new rules to curb dominance of internet giants Alibaba fined for acquisitions from years before. Closer examination of mergers and acquisitions may give uncertainty about the growth of large Internet businesses.
“We consider the release a bit exploratory, given the broader uncertainty surrounding Ant / Jack Ma,” said Chuanyi Zhou, a credit analyst at Lucror Analytics in Singapore. “It may well reveal how seriously global investors are experiencing the rapidly evolving regulatory environment in China and the potential impact on Alibaba.”
Alibaba raised about $ 11 billion from its Hong Kong shares in late 2019 and had a cash capacity of nearly $ 90 billion at the end of September.
The sale comes as companies rally to issue bonds. Lenders have sold more than $ 65 billion in securities worldwide so far this year, according to a record $ 3.6 billion in 2020, according to data compiled by Bloomberg.
The firm used the global debt market for the first time in 2014 to raise $ 8 billion shortly after its remarkable debut in New York. It last came to the foreign market in 2017 with a $ 7 billion foreign transaction and it has to repay or refinance $ 1.5 billion in debt, which was compiled, according to Bloomberg.
Wholesalers
China’s largest dollar-denominated securities transaction sold in decade
Source: Bloomberg
Alibaba’s dollar bond by 2027 is trading at around 111 cents on the dollar, shows the prices compiled by Bloomberg.
Alibaba has spent billions over the past few years acquiring interests in promising businesses, expanding its logistics network and cloud hosting services, and building an international business via the Lazada online shopping mall in Singapore. It’s now working on a bruise with Meituan over food delivery, while beating opponents like JD.com Inc. and Tencent Holdings Ltd. in grocery stores to retail defenses.
– With the help of Adrian Yim, Coco Liu and Edwin Chan