Tencent Holdings announced on Wednesday (New York time) that it has raised USD 6 billion in a bond sale. The notes are scheduled to be issued on April 11.
Most of these US dollar bonds—which are set to mature in five years, seven years, ten years, or 30 years—are priced with fixed interest rates between 3.28% and 4.525%. The company is securing funds outside of its home country at rates lower than the Chinese central bank’s five-year benchmark lending rate of 4.9%.
On Monday, Tencent disclosed in a separate announcement that it has raised the limit of its global medium term note program from USD 10 billion to USD 20 billion.
The latest bond sale falls under this program. Proceeds will be put toward “general corporate purposes.”
Bloomberg reported on Tuesday that this bond sale could be the largest in Asia excluding Japan since January 1. Last month, Bloomberg reported that Japan’s Takeda Pharmaceutical Co. filed to issue as much as JPY 500 billion (USD 4.5 billion) in bond notes. It would be the country’s largest ever bond sale if the entire amount is issued in one go.
Tencent booked RMB 14.2 billion (USD 2.1 billion) in net profits in the fourth quarter of 2018, down 32% year-on-year, and below the expectation of RMB 18.9 billion.
The company has been investing in various business, including those in the e-commerce sector, to stay competitive. This week alone, Tencent agreed to buy a 6.7% stake in e-commerce SaaS vendor Youzan for HKD 549.5 million (USD 70 million), and has increased its stake in Weimob—a B2B SaaS vendor that helps companies advertise to their target consumers on WeChat—from 2.92% to 7.73%.
Tencent will hold its annual general meeting on May 15 with a motion to buy back up to 10% of its shares.
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