Chinese e-commerce giant Alibaba has launched a bond issue aimed at raising $7bn just three years after selling $8bn of debt.
The bonds are being offered in five tranches – 5.5-year, 10-year, 20-year, 30-year and 40-year.
Proceeds from the sale will be used to invest in long-term growth.
CreditSights analysts Sandra Chow and Luther Chai said the 20-year bonds were likely to be the most attractive entry point.
“Alibaba’s proposed bond is likely to receive strong support from Asian accounts owing to its robust credit profile, a ‘home bias’ among local investors and a need for sector diversification. The tech sector is a small component with the Asian credit markets,” they said.
“The pick-up in Alibaba spreads and our comfort with its fundamentals make it particularly attractive for ratings-constrained investors in our view.”
Second bond issuance
CreditSights has rated Alibaba’s 10-year notes as ‘outperform’, and given the other bonds a ‘market perform’ rating.
Alibaba’s second international bond follows an $8bn, six-part offering in 2014 that was the largest bond financing from an Asian company at the time.
Morgan Stanley, Citigroup, Credit Suisse, Goldman Sachs and JP Morgan are acting as joint book-runners for the new offering.