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Alibaba Plans to Raise USD5 Billion Through New Bond Sales

February 3, 2021 6:45 pm

Beijing (PingWest)- Chinese e-commerce giant Alibaba Group Holding Ltd will initiate a dollar bond sale that allow it to raise up to USD5 billion.  .

The book for the offering will open on Thursday and the deal is expected to be priced on the same day, Reuter reported, citing a person with direct knowledge of the matter.

The upcoming bood offering is expected to include a tranche of sustainability bonds due 2041, said the sources. The bood offering will have various maturities up to 40 years, the term sheet showed,

Alibaba will use the net proceeds from the bond sales to boost its working capital and repay its offshore debt.

Some investors indicated that the bond sales will test sentiment towards Alibaba as it is under tight scrutiny after founder Jack Ma publicly criticized the China's regulatory system in a speech in late October.

“China doesn’t have a systemic financial risk and problem because China’s finance doesn’t have a system, we need to prevent bad things from happening by setting up a functioning financial system.”

“Today banks are still operating with a pawnshop mentality, banks run like pawn shop because they always require sufficient collateral to make loans. China’s financial pawnshop mentality is the most serious, either enterprise carry huge pressure as they fully pledge assets to borrow money, or they recklessly borrow money and continually increase leverage, leading huge debt as a result,” said Jack Ma.

The company is announcing the debt plan after it beat analysts estimates for third-quarter revenue.

Alibaba Group Holding Booked a 37% percent year-over-year increase in revenue for the quarterly ended December, boosted by a extended double 11 shopping festival in November last year.

Citigroup, Credit Suisse, Morgan Stanley, JPMorgan and China International Capital Corporation are acting as joint bookrunners for the proposed offering.