(Bloomberg) – Alibaba Group Holding Ltd. has hired banks to sell dollar and yuan bonds that will be used to repay foreign debt and buy back shares, after the Chinese tech conglomerate issued a record convertible bond earlier this year.
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Details, including the principal amount and interest rates, have not yet been determined, according to a statement on Sunday. Bloomberg reported on November 15 that Alibaba is considering selling bonds totaling about $5 billion.
The company plans to offer dollar-denominated senior unsecured notes with maturities of 5.5, 10.5 and 30 years, according to a person familiar with the matter. The offshore yuan bonds will have maturities of 3.5, 5, 10 and 20 years.
Yield premiums on dollar securities in Asia fell to historic lows in recent weeks as China’s stimulus measures increased the appeal of debt in the region. Alibaba wants to buy back shares primarily listed in the U.S. because of higher liquidity there, CFO Toby Xu said in a Nov. 15 earnings call. Shares are down nearly 25% from their October high but are up about 14% this year.
Proceeds from the bond will also be used for general corporate purposes, the company said in the statement. In May, Alibaba sold $5 billion of convertible bonds in a private offering, a record dollar sale by an Asian company at the time.
The latest offering would be Alibaba’s first dollar bills sold in a public market since 2021, when it completed a multi-part $5 billion deal.
Yield premiums on Alibaba’s dollar bills rose 3 to 5 basis points on Monday after the company ordered banks to accept the new offerings, compared with a 2 to 3 basis point increase for those on investment-grade U.S. currency bonds from the region, credit traders said.
The banks working with Alibaba have been instructed to host a series of conference calls for fixed income investors in Asia, Europe and the U.S. starting Monday, the person said.
–With help from Ameya Karve.
(Updates with details throughout.)
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