(Bloomberg) — Alibaba Group Holding Ltd. has hired banks to sell dollar and yuan bonds that will be used to pay back offshore debt and buy back shares, following the Chinese tech conglomerate’s issuance of a record convertible bond earlier this year.
Most Read from Bloomberg
Details, including the principal amount and interest rates, are not yet determined, according to a statement dated Sunday. Bloomberg reported on Nov. 15 that Alibaba was considering selling bonds totaling about $5 billion.
The company plans to offer dollar-denominated senior unsecured notes that mature in 5.5-, 10.5- and 30 years, according to a person familiar with the matter. Its offshore yuan bonds will come with tenors of 3.5-, 5-, 10- and 20 years.
Yield premiums on dollar securities in Asia fell to all-time lows in recent weeks, following China’s stimulus measures that boosted the appeal of the region’s debt. Alibaba is looking to mainly buy back US-listed shares due to higher liquidity there, CFO Toby Xu said in an earnings call Nov. 15. The shares are down nearly 25% from their October high, though up about 14% for the year.
The bond proceeds also will be used for general corporate purposes, the company said in the statement. In May, Alibaba sold $5 billion of convertible bonds in a private offer, a record dollar-denominated sale by an Asian company at the time.
The latest offering would be Alibaba’s first dollar notes to be sold in a public market since 2021, when it completed a $5 billion multi-part deal.
Yield premiums on Alibaba’s dollar notes expanded by 3 to 5 basis points on Monday after the company mandated banks for the new offering, compared with a 2-to-3 basis point widening for those on the region’s investment grade US-currency bonds, according to credit traders.
The banks working with Alibaba have been mandated to arrange a series of fixed income investor conference calls across Asia, Europe and the US starting Monday, the person said.
–With assistance from Ameya Karve.
(Updates with details throughout.)
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
