Tencent appoints banks for first bond sale in four years

[HONG KONG] Chinese technology and mobile gaming giant Tencent Holdings has appointed banks for its first bond offering in four years.

The company is proposing to sell offshore-yuan denominated notes with five-year, 10-year and 30-year tenors as early as Tuesday (Sep 16), according to a source familiar with the matter.

It has mandated banks, including Bank of China and JPMorgan Chase as the joint global coordinators, and some others, such as Bank of Communications as well as Morgan Stanley, as the joint bookrunners for the deal, the source added.

If launched, it would be the tech company’s first-ever dim sum bond and the first bond offering in any currency since 2021, according to data compiled by Bloomberg. The newly priced bonds will add to Tencent’s existing US$17.75 billion in outstanding notes.

The move comes amid increased fundraising activity in China’s tech sector, with Alibaba recently raising about US$3.2 billion in the year’s biggest offering of convertible notes so far, according to data compiled by Bloomberg. The appetite for cash among Chinese tech giants is a sign of competition in the sector, where companies are putting billions of US dollars into cloud computing, artificial intelligence (AI) and food delivery.

Another Chinese tech giant, Baidu, recently raised 4.4 billion yuan (S$792 million) from a dim sum bond offering, following a 10 billion yuan issuance in March.

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So far, the total amount Tencent aims to raise through this offering is unknown. Tencent has a US$1 billion bond due in January 2026 and a US$500 million note maturing in April next year, Bloomberg-compiled data show.

Tencent reported a 15 per cent jump in revenue to US$25.7 billion in the June quarter, about 3 per cent higher than analysts’ projections. The company is also ramping up capital investment in AI research after domestic rivals launched models to compete with the likes of OpenAI, though it is stressing prudence in AI spending. BLOOMBERG