Exclusive: Alibaba plans $ 5 billion bond this month amid scrutiny of sources

HONG KONG (Reuters) – China’s Alibaba Group Holding Ltd. plans to raise at least $ 5 billion this month through the sale of US-denominated bonds, said four people familiar with the case, co-founder Ma Amidst regulatory scrutiny of the empire of.

FILE PHOTO: The logo of Alibaba Group is being seen at its office in Beijing, China on 5 January 2021. REUTERS / Thomas Peter / File Photo

Based on the response from investors, income could reach $ 8 billion which the e-commerce leader is likely to use for general corporate spending, one of the people said.

The fundraising will test investor sentiment towards Alibaba, amid a regulatory crackdown on it and financial technology affiliate Ant Group. Chinese authorities have tightened on Ma’s business empire since they publicly criticized the country’s regulatory system in October, stalling the Ant Group’s $ 37 billion stock market listing.

Ma’s absence from public view at the time of the intervention fueled social media speculation over her whereabouts.

The bond sales plan, including the timeline, has not been finalized and is subject to change, people said, declining to recognize as they were not authorized to speak to the media.

Alibaba declined to comment.

Since Ma’s speech, Chinese regulators have begun an antitrust investigation into Alibaba and ordered FinTech Ant to replace its lending and other consumer finance businesses, including a holding company to meet capital requirements Construction is also included.

US President Donald Trump has also relaxed tensions by banning transactions with eight Chinese software applications, including the Ant Group’s Alipay mobile payment app.

Chinese regulators are also reviewing Ant’s equity investments in dozens of companies and are considering whether to instruct the firm to divest some of those investments, Reuters has reported.

“Investors will need some kind of public presence to convince Jack Ma of a bond,” said an Asia credit analyst with the European bank, who spoke to the media. Was not authorized and therefore identified as rejected.

The analyst said, “Given Alibaba’s current situation, they will have to pay it at a premium.” “But Alibaba is still a company worth investing in the long term.”

Alibaba’s Hong Kong-listed shares rose 4% on Wednesday, and the benchmark index declined 0.4%. The stock price had fallen 5.6% in the previous three sessions.

Last month, Alibaba said it would increase the value of a share repurchase program from $ 6 billion to $ 10 billion.


According to refinery data, Alibaba’s international bond offer will be third in the group if it is finalized. It sold bonds worth US $ 8 billion in 2014 and Trench for US $ 7 billion in 2017.

With its latest bond sale, Alibaba will join a group of Asian companies that have taken advantage of cheaper lending costs and abundant liquidity in global markets in recent months.

The companies sold had US $ 363.2 billion worth of bonds in Asia last year, up 9% from a year earlier and the highest value on record, Dealogic data showed.

The terms of Alibaba’s offer were not immediately known. Two of the people said that the tenure is likely to be 10 years and marketing documents are likely to be available as of next week.

One of those involved in the deal said that Alibaba wanted to use the issuance to send a message to the market that “in light of the latest regulatory investigation, the firm is still recovering and has the support of some investors”.

Oshadhi Kumarasiri, a Lightstream research analyst who publishes on the SmartKarma platform, said Alibaba has a long-term debt of about $ 10 billion in November, so it makes sense to refinance it – even if this suggestion is about filling confidence. Be in

“However, I am more pragmatic and still anxious to last longer with the current regulatory nervousness on Alibaba.”

Reporting by Sumit Chatterjee, Julie Zhu and Ken Wu; Additional reporting by Scott Murdoch and Anshuman Daga; Editing by Christopher Cushing


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