Alibaba Group Holding Ltd. plans to raise up to $ 8 billion from selling dollar bonds as early as next week, according to people familiar with the matter.
The e-commerce giant plans to raise at least $ 5 billion, but could end more depending on the reception, said people who are not authorized to speak publicly and asked not to be identified. The business will be a multi-tranche offer, with specific deadlines yet to be defined, they said. Alibaba declined to comment. Reuters previously reported the planned sale.
Withdrawing the sale at a time when Jack Ma’s empire is facing intense pressure from the government at home would be a sign of confidence from the global investor in the company. In recent months, authorities 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 can add uncertainty about the growth of large Internet companies.
“We see the issue as exploratory, given the broader uncertainty surrounding Ant / Jack Ma,” said Chuanyi Zhou, credit analyst at Lucror Analytics in Singapore. “It may well reveal the seriousness with which global investors perceive the rapidly evolving regulatory environment in China and the potential impact on Alibaba.”
Alibaba raised about $ 11 billion from the sale of shares in Hong Kong in late 2019 and had a treasure trove of nearly $ 90 billion in late September.
The sale occurs when companies flock to issue bonds. Borrowers have sold more than $ 65 billion in dollar bonds globally so far this year, after a record of more than $ 3.6 trillion in 2020, according to data compiled by Bloomberg.
The firm accessed the global debt market in 2014 for the first time to raise $ 8 billion shortly after its New York equity debut. The last time it hit the offshore market with a large $ 7 billion bond deal in 2017 and needs to pay or refinance about $ 1.5 billion of dollar debt due this year, data compiled by Bloomberg show.
Great sellers
China’s largest dollar bond deals sold in the past decade
Source: Bloomberg
Alibaba’s 2027 dollar bond is trading at around 111 cents on the dollar, according to prices compiled by Bloomberg.
In recent years, Alibaba has spent billions acquiring stakes in promising startups, expanding its logistics network and cloud hosting services and building an international business through the Singapore-based online shopping Lazada. She is now engaged in a hard-hitting battle with Meituan in food delivery, while turning down rivals like JD.com Inc. and Tencent Holdings Ltd. in the retail grocery business.
– With the help of Adrian Yim, Coco Liu and Edwin Chan