Alibaba Group Prices 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 has announced the pricing of a dual-currency senior unsecured notes offering, consisting of US$2.65 billion in USD-denominated notes and RMB17 billion in RMB-denominated notes. The USD notes include three tranches with rates ranging from 4.875% to 5.625% due between 2030 and 2054. The RMB notes comprise four tranches with rates from 2.65% to 3.50% maturing between 2028 and 2044. The offerings are expected to close in November 2024. The company plans to use the proceeds for general corporate purposes, including offshore debt repayment and share repurchases.

Positive

• Successful raising of substantial dual-currency funding totaling US$2.65B and RMB17B
• Proceeds will be used for debt repayment and share repurchases, potentially improving capital structure
• Diverse maturity profile ranging from 2028 to 2054 indicates strong long-term planning

Negative

• Additional debt burden with interest rates up to 5.625% for USD notes
• Long-term debt commitments extending up to 30 years

Insights

Financial Analyst

This major debt offering totaling $2.65 billion in USD notes and RMB17 billion (~$2.36 billion) in RMB notes represents a significant financial move by Alibaba. The structure includes multiple tranches with maturities ranging from 2028 to 2054, offering varying interest rates between 2.65% and 5.625%.

The dual-currency structure demonstrates sophisticated financial planning, with the RMB portion potentially hedging currency risks while serving domestic operations. The stated use of proceeds for debt repayment and share repurchases suggests a strategic balance sheet management approach. The relatively competitive interest rates, despite recent market volatility, indicate strong investor confidence in Alibaba's credit quality.

The registration rights agreement for USD notes provides important liquidity assurance to institutional investors, potentially leading to better pricing terms. This debt raising comes at a important time as the company continues its strategic transformation and could provide important financial flexibility.

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 the pricing of (i) an offering 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) an offering 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 offering of the USD Notes is expected to close on November 26, 2024, and the offering of the RMB Notes is expected to close on November 28, 2024, both subject to customary closing conditions.

Alibaba intends to use the net proceeds from the offering of the Notes for general corporate purposes, including repayment of offshore debt and share repurchases.

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 are being 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 intends to enter into a registration rights agreement in connection with the offering of the USD Notes, under which it will agree 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 are being 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. Any offering of securities will be made by means of one or more offering documents, which will contain detailed material information about the Company and its management and financial statements.

This press release contains information about the pending offering of the Notes, and there can be no assurance that the offering will be completed.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “future,” “aim,” “estimate,” “intend,” “seek,” “plan,” “believe,” “potential,” “continue,” “ongoing,” “target,” “guidance,” “is/are likely to” and similar statements. In addition, statements that are not historical facts, including statements about the intended use of proceeds, the terms of the Notes, the intention of the Company to enter into a registration rights agreement in connection with the offering of the USD Notes and the terms of such agreement, and whether the Company will complete the offering of the Notes, are or contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to: financial community and rating agency perceptions of the company and its business, financial condition and the industries in which it operates, market conditions, and the satisfaction of customary closing conditions related to the proposed offering. Further information regarding these and other risks is included in Alibaba’s filings with the U.S. Securities and Exchange Commission and announcements on the website of The Stock Exchange of Hong Kong Limited. All information provided in this press release is as of the date of this press release and are based on assumptions that we believe to be reasonable as of this date, and Alibaba does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241119897976/en/

Investor Relations Contact

Lydia Liu

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

What is the total value of Alibaba's (BABA) new notes offering in 2024?

Alibaba's total notes offering consists of US$2.65 billion in USD-denominated notes and RMB17 billion in RMB-denominated notes.

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

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

How will Alibaba (BABA) use the proceeds from the 2024 notes offering?

Alibaba plans to use the proceeds for general corporate purposes, including repayment of offshore debt and share repurchases.

When will Alibaba's (BABA) 2024 notes offerings close?

The USD Notes offering is expected to close on November 26, 2024, and the RMB Notes offering on November 28, 2024.