Wednesday, November 29News That Matters

Alibaba looking to raise up to $5 billion in U.S. dollar bond issuance after earnings beat

Signage for Alibaba Group Holding Ltd. covers the front facade of the New York Stock Exchange November 11, 2015.
Brendan McDermid | Reuters

GUANGZHOU, China — Alibaba is looking to raise up to $ 5 billion via U.S. dollar-denominated bonds, a person familiar with the matter told CNBC.

The Chinese e-commerce giant announced the bond offering on Tuesday, in a statement with very few details. Alibaba plans to sell several tranches of bonds with different maturities up to 40 years, the person said.

Alibaba’s bond offering comes after it reported December quarter earnings that beat expectations and in which it reported its cloud computing division turned profitable for the first time.

The debt issuance will be a test of investor appetite for Alibaba. The company is facing an anti-monopoly probe and its founder Jack Ma appears to have fallen out of favor with the Chinese government after he made negative comments toward the country’s financial regulators.

Alibaba will be taking advantage of the low interest rate environment in the U.S. right now by issuing the bonds.

The company said the proceeds will be used for general corporate purposes, including working capital needs, repayment of offshore debt and potential acquisitions of, or investments in, complementary businesses.

So-called “sustainability notes” will also be issued with the proceeds going toward green projects such as renewable energy, the company said.

Citigroup, Credit Suisse, Morgan Stanley, J.P. Morgan and CICC are the underwriters for the deal.

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