Tencent raises US$4.2bil in its second major bond deal in a year

HONG KONG: Tencent Holdings Ltd raised $4.15 billion on Friday in its second major bond deal in less than a year as global investors were enticed by its attractive pricing and overlooked a regulatory crackdown on China's tech giants.

Asia's most valuable company said in a statement it raised $500 million in a 10-year tranche, $900 million in 20-year debt, $1.75 billion in 30 year and $1 billion in 40-year debt.

Final orders for the dollar-denominated bonds were worth $21 billion when the books closed early Friday during U.S. trading hours, according to two sources with direct knowledge of the matter.

The enthusiastic response contrasted with investor jitters around some state-owned Chinese issuers this week as the delayed release of China Huarong Asset Management Co's annual earnings prompted concerns over its ability to repay offshore debt.

Tencent declined to comment on the demand for its bonds. The sources could not be named as the information had not yet been made public.

"The book ballooned after the U.S. opened ... they'll rush in like there's no tomorrow if you price it a little bit wider," said a Hong Kong based investor who participated but could not be named due to confidentiality constraints.

The bond pricing was set at 25 basis points to 35 basis points lower than the initial price guidance delivered to potential investors when the deal was launched on Thursday.

The 10-year tranche was priced at 130 basis points above U.S. Treasuries, and the 20 year was set at 150 basis points.

Pricing for the 30-year tranche was 155 basis points and the 40 year was 165 basis points above their benchmark lending rate.

In comparison, Alibaba Group Holding paid between 35 to 50 basis points less than Tencent for cash over the same tenures when it issued $5 billion worth of debt in February.

China's tech giants are facing an unprecedented regulatory crackdown due to concerns that they have built market power that stifles competition, misused consumer data and violated consumer rights.

Tencent's share price has fallen 18.3% from its January peak so far this year on the back of tighter regulations potentially hurting its future growth prospects. Still, it boasts a market capitalisation of about $765 billion, the most for a listed Asian company.

It raised $6 billion in May last year, when it also issued 40-year debt for the first time. - Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3

Tencent , fundraising , bonds


Next In Business News

Human error and shaky grid spark new global-chip supply concerns
Grab’s SPAC vehicle Altimeter near record low
Singapore stocks tumble as strict virus curbs return
Foxconn sees 2Q surge on WFH boom
Ant leapfrogs banks to top China fund sale rankings
Wider vaccination and herd immunity are vital to the recovery
Oil extends loss on India Covid-19 cases, U.S. pipeline restart
Stocks rebound as Fed officials calm inflation fears, for now
Japan Q2 economic growth forecasts cut sharply on coronavirus restrictions
Subang Airport car park upgrading to complete by 3Q, 200 extra parking bays

Stories You'll Enjoy