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Alibaba Group Holding Ltd. will kick off what could be a $5 billion dollar bond sale this week, picking up a plan that went quiet last month when its founder had been out of sight for months.
The Chinese e-commerce giant will issue debt to boost working capital and repay its offshore debt, according to a filing Tuesday. Some of sale will comprised of sustainability bonds — the company’s first ever — with the proceeds earmarked for eligible projects like responding to the Covid-19 crisis and investing in renewable energy, according to the filing.
Alibaba was aiming to raise at least $5 billion a month ago, Bloomberg reported in early January. Investors had wondered whether the company could pull it off as founder Jack Ma hadn’t been seen in public since his Internet empire was hit with growing antitrust scrutiny.
The company is resuming the debt plans after reporting a 37% increase in quarterly revenue that beat analysts’ expectations, giving the company a much-needed boost amid the regulatory crackdown. Beijing in November torpedoed affiliate Ant Group Co.’s record initial public offering and began an investigation into the online retailer, fueling uncertainty over the future of Ma’s tech empire. But the billionaire entrepreneur’s brief return to public view in January signaled that worst-case scenarios may be less likely.
The debt sale could raise as much as $5 billion, according to a person with knowledge of the matter, who asked not to be identified as the details are private. Citigroup Inc., Credit Suisse Group AG, Morgan Stanley, JPMorgan Chase & Co. and China International Capital Corp. are among the underwriters, according to the filing.
Alibaba isn’t alone in choosing to tap the global bond market now. Asian borrowers just set a new record January for dollar bond sales, capitalizing on investors’ hunger for higher-yielding assets amid ultra-low interest rates.
Alibaba plans to issue bonds in four maturities, with the longest due in 40 years, the person said. The plans are subject to change per market and other conditions, according to the filing.
The company could not be reached immediately for comment outside of regular business hours.
— With assistance by Ina Zhou