Alibaba Group Announces Completion of US$2.65 Billion Offering of U.S. Dollar-denominated Senior Unsecured Notes and RMB17 Billion Offering of RMB-denominated Senior Unsecured Notes

Rhea-AI Summary

Alibaba Group (NYSE: BABA) has completed two major note offerings: a US$2.65 billion U.S. dollar-denominated senior unsecured notes offering and a RMB17 billion RMB-denominated senior unsecured notes offering. The USD Notes include three tranches: $1 billion at 4.875% due 2030, $1.15 billion at 5.250% due 2035, and $500 million at 5.625% due 2054. The RMB Notes comprise four tranches with rates ranging from 2.65% to 3.50% and maturities from 2028 to 2044. The notes were offered to qualified institutional buyers in the U.S. and non-U.S. persons in offshore transactions.

Positive

• Successfully raised significant capital through dual-currency bond offerings totaling US$2.65B and RMB17B
• Diverse maturity profile ranging from 2028 to 2054 provides financial flexibility
• Strong investor interest enabling multiple tranches in both USD and RMB

Negative

• Increased debt burden with significant interest payment obligations
• Long-term debt commitments extending up to 30 years
• Higher interest rates on USD notes (4.875%-5.625%) compared to RMB notes (2.65%-3.50%)

Insights

Fixed Income Analyst

This substantial dual-currency debt offering totaling $2.65 billion in USD notes and RMB17 billion in RMB notes demonstrates Alibaba's strong credit profile and ability to access diverse funding sources. The USD notes' yields ranging from 4.875% to 5.625% and RMB notes from 2.65% to 3.50% reflect current market rates and Alibaba's credit quality. The long-dated maturities (up to 2054 for USD and 2044 for RMB) indicate strong investor confidence and provide Alibaba with extended debt maturity profile. This debt raising could support various corporate initiatives including refinancing, working capital, or strategic investments. The registration rights agreement for USD notes enhances their liquidity potential and appeal to institutional investors.

Corporate Finance Strategist

The dual-currency bond issuance showcases Alibaba's sophisticated capital management strategy. By tapping both USD and RMB markets, the company optimizes its funding costs and hedges currency risks naturally. The pricing achieved across different tenors indicates robust demand from global investors despite China's economic headwinds. The longer-dated tranches, particularly the 30-year USD notes, suggest the company is locking in current rates before potential market shifts. This debt raising provides financial flexibility without immediate equity dilution, though investors should monitor the impact on leverage ratios and debt service capabilities.

HANGZHOU, China--(BUSINESS WIRE)-- Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988 (HKD Counter) and 89988 (RMB Counter), “Alibaba,” “Alibaba Group” or the “Company”) today announced (i) the completion of an offering, on November 26, 2024, of US$2.65 billion aggregate principal amount of U.S. dollar-denominated senior unsecured notes, consisting of:

US$1,000,000,000 4.875% notes due 2030 at an issue price per note of 99.838%;
US$1,150,000,000 5.250% notes due 2035 at an issue price per note of 99.649%; and
US$500,000,000 5.625% notes due 2054 at an issue price per note of 99.712% (collectively, the “USD Notes”);

and (ii) the completion of an offering, on November 28, 2024, of RMB17 billion aggregate principal amount of RMB-denominated senior unsecured notes, consisting of:

RMB8,400,000,000 2.65% notes due 2028 at an issue price per note of 100%;
RMB5,000,000,000 2.80% notes due 2029 at an issue price per note of 100%;
RMB2,500,000,000 3.10% notes due 2034 at an issue price per note of 100%; and
RMB1,100,000,000 3.50% notes due 2044 at an issue price per note of 100% (collectively, the “RMB Notes,” and together with the USD Notes, the “Notes”).

The Notes have not been registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. The USD Notes have been offered and sold in the United States only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act and to certain non-U.S. persons in offshore transaction in reliance on Regulation S under the U.S. Securities Act. Alibaba entered into a registration rights agreement in connection with the offering of the USD Notes, under which it agreed to use commercially reasonable efforts to file an exchange offer registration statement to exchange the USD Notes for a new issue of substantially identical debt securities registered under the Securities Act or, under specified circumstances, a shelf registration statement to cover resales of the USD Notes. The RMB Notes have been offered and sold only to certain non-U.S. persons in offshore transaction in reliance on Regulation S under the U.S. Securities Act.

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any securities, in the United States or elsewhere, and shall not constitute an offer, solicitation or sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241128162517/en/

Investor Relations Contact

Lydia Liu

Head of Investor Relations

Alibaba Group Holding Limited

investor@alibaba-inc.com

Media Contacts

Cathy Yan

cathy.yan@alibaba-inc.com

Ivy Ke

ivy.ke@alibaba-inc.com

Source: Alibaba Group Holding Limited

FAQ

How much did Alibaba (BABA) raise in its latest bond offerings?

Alibaba raised US$2.65 billion in USD-denominated notes and RMB17 billion in RMB-denominated notes in November 2024.

What are the interest rates for Alibaba's (BABA) 2024 USD bond offering?

The USD notes have three tranches: 4.875% due 2030, 5.250% due 2035, and 5.625% due 2054.

When will Alibaba's (BABA) latest RMB bonds mature?

The RMB bonds have varying maturities: 2028, 2029, 2034, and 2044.