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Alibaba Group Holding Ltd. plans to raise up to $ 8 billion by selling dollar bonds as early as next week, according to people familiar with the matter.
The e-commerce giant aims to raise at least $ 5 billion but could do away with more depending on the reception, said people who are not authorized to speak publicly and have asked not to be identified. The deal will be a multi-slice offering, with specific tenors to be determined, they said. Alibaba declined to comment. Reuters earlier announced the planned sale.
Completing the sale at a time when Jack Ma’s empire faces intense government pressure in his country would be a sign of global investor confidence in the company. In recent months, officials have blocked Ant Group Co.’s $ 35 billion IPO, proposed new rules to curb the dominance of internet giants, and fined Alibaba for acquisitions from previous years. A closer look at mergers and acquisitions could add uncertainty to the growth of large internet companies.
“We see the show as somewhat exploratory given the wider uncertainty around Ant / Jack Ma,” said Chuanyi Zhou, credit analyst at Lucror Analytics in Singapore. “This may well reveal how seriously global investors perceive the rapidly changing regulatory environment in China and the potential impact on Alibaba.”
Alibaba raised around $ 11 billion through its sale of shares in Hong Kong in late 2019 and had a cash flow of nearly $ 90 billion at the end of September.
The sale comes as companies flock to issue bonds. Borrowers have sold more than $ 65 billion in dollar bonds worldwide so far this year, following a record high of more than $ 3.6 trillion in 2020, according to data compiled by Bloomberg.
The company tapped the global debt market in 2014 for the first time to raise $ 8 billion shortly after its historic debut in stocks in New York City. It last entered the offshore market with a one-off $ 7 billion bond deal in 2017 and is due to repay or refinance some $ 1.5 billion of debt due this year, according to data compiled by Bloomberg.
Great sellers
The biggest deals in Chinese dollar bonds sold in the last decade
Source: Bloomberg
Alibaba’s dollar bond due 2027 is trading at around 111 cents on the dollar, according to prices compiled by Bloomberg.
Alibaba has spent billions in recent years acquiring stakes in promising startups, expanding its logistics network and cloud hosting services, and developing a global business through the Singapore-based Lazada online mall. He is now engaged in a deadly battle with Meituan in delivering food, while fending off rivals like JD.com Inc. and Tencent Holdings Ltd. in businesses from grocery to retail.
– With the help of Adrian Yim, Coco Liu and Edwin Chan
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