Alibaba made a $38 Billion Bond Sale


Alibaba Group Holding Ltd. is looking to raise as much as $8 billion selling dollar bonds as early as next week, giving global investors a chance to bet on the Chinese e-commerce giant’s long-term prospects at a time when the company and its co-founder face intense government pressure back home.

The four-tranche offer received more than $38 billion in orders at the peak, according to people with knowledge of the matter. The notes comprising 10-year, 20-year, 30-year, and 40-year maturities were priced at 30 basis points to 40 basis points lower than initial guidance, as measured in yields above comparable Treasuries, said the people, who aren’t authorized to speak publicly.


The robust demand helped Alibaba secure relatively cheap borrowing costs. Comparable notes sold by Inc. in June saw some of their spreads tighten by around 20 basis points from initial pricing. Thanks to a decline in U.S. interest rates, Alibaba also fetched lower coupons on each of its new notes compared to those of the same tenors sold in 2017.

The new dollar debt sale is the biggest in Asia since a $6 billion issuance by rival Tencent Holdings Ltd. in May. It comes amid growing expectations that Jack Ma’s tech empire may have avoided the worst-case scenarios — which had ranged from a government-led takeover to a break-up of his companies — after the billionaire entrepreneur briefly returned to public sight last month and as Ant Group Co. began its lengthy overhaul process.

Washington’s decision to drop deliberations of an investment ban on the firm and Alibaba’s consensus-beating quarterly sales performance also helped ease concerns about its future amid a regulatory crackdown.


“Alibaba bonds have been well received in the market, with pricing having tightened significantly from its initial guidance. Approval of Ant’s restructuring plan has reduced uncertainty over the regulatory environment, which contributed to a greater appetite for Alibaba’s new issuance,” said Chang Wei Liang, a macro strategist at DBS Bank Ltd. in Singapore.

Alibaba was originally aiming to raise at least $5 billion via a debt sale that could’ve been increased to $8 billion depending on the reception, Bloomberg reported in early January.

Investors had wondered then whether the company could pull off the deal as founder Ma hadn’t been seen in public since his Internet empire was hit with growing antitrust scrutiny. He’s since made an appearance in a live-streamed video chat.

Alibaba’s dollar bonds have enjoyed a strong rebound since a selloff in China’s offshore investment-grade notes at the beginning of the year. Spreads on the firm’s 3.4% note due 2027 were indicated at about 78.7 basis points over Treasuries on Thursday, some 57 basis points tighter than its January high, the latest Bloomberg-compiled data show.


Harshit Bhasin
I’m a student currently doing B.A(hons) English from Dyal Singh College, Delhi University. I like to read and write and apart from it, I like watching movies, series, animated series (Animes) and playing games. I’m also a sportsperson and I like to perform outside activities regularly.

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