Baidu raises $ 1 billion ESG bond issue despite struggles in Chinese tech sector

HONG KONG, Aug. 19 (Reuters) – Chinese internet giant Baidu Inc (9888.HK) has raised $ 1 billion in a two-tranche US dollar sustainability bond, its first environmental transaction, social and governance (ESG).

A 5.5-year tranche bond raised $ 300 million and the 10-year tranche raised $ 700 million, according to a company statement.

The shorter-dated bond was denominated in US Treasuries plus 83 basis points, while the longer-dated issue was denominated in US Treasuries plus 113 basis points.

The final price was significantly cheaper for Baidu than when it was first reported to investors on Wednesday.

The initial price predictions given to investors were US Treasuries plus 115 basis points for the 5.5-year bond, while 10-year bonds were US Treasuries plus 150 basis points, according to one. terms sheet reviewed by Reuters.

Baidu said he intends to use the proceeds to repay debt and fund ESG-related projects within the company.

Chinese companies have raised $ 121.2 billion in U.S. dollar debt financing so far in 2021, according to Dealogic data, slightly below the $ 126.6 billion raised in the same period. last year.

In its prospectus for the deal filed with the U.S. Securities and Exchange Commission (SEC), Baidu acknowledged that the impact of China’s regulatory crackdown on the tech industry was not yet fully understood.

In July, China said companies with more than one million customers should be vetted by the Cyberspace Administration of China (CAC) before proceeding with overseas listings.

“It is still unclear whether the relevant requirements will apply to companies that have been listed in the United States and intend to make further stock or debt offerings like us. can not predict the impact of the draft measures, “Baidu said. said in the prospectus.

Chinese regulators on Tuesday released new rules targeting China’s tech industry to tackle anti-competitive behavior and corporate data processing.

Reporting by Scott Murdoch in Hong Kong; Editing by Edwina Gibbs

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