Date
16 December 2017
Alibaba is riding on the enormous success of its equity offering to boost demand for the bond sale. Photo: AFP
Alibaba is riding on the enormous success of its equity offering to boost demand for the bond sale. Photo: AFP

Alibaba seeks US$8 billion in first US bond sale

Fresh from the success of its US$25 billion initial public offering in New York in September, Alibaba Group Holding Ltd. is seeking up to US$8 billion in a US bond sale, Bloomberg News reported.

The Chinese e-commerce giant plans to issue its first-ever US dollar-denominated notes to refinance its credit facilities, the report said, citing a statement from the company.

The bonds have been rated A+, or the fifth highest investment-grade rating, by Standard & Poor’s and an equivalent A1 by Moody’s Investors Service.

Alibaba, with a market capitalization of almost US$300 billion, has US$11 billion in loans and credit lines, according to data compiled by Bloomberg.

“Given that they just had their IPO, they don’t necessarily need to come to market,” Nathan Barnard, a fixed-income analyst at Leader Capital Corp., told the news agency. “They’re pretty flush with capital. It’s another example of companies being opportunistic and trying to take advantage of low rates while they can.”

“The company is leveraging the momentum from its equity offering, which increases the potential investor demand in a large bond offering,” Jody Lurie, a corporate-credit analyst at Janney Montgomery Scott, was quoted as saying.

Morgan Stanley, Citigroup Inc., Deutsche Bank AG and JPMorgan Chase & Co. will market the debt to investors starting next week, the report said, citing an unnamed source.

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CG

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