Alibaba Taps Bond Market in Multi-billion Dollar Raising

Alibaba Taps Bond Market in Multi-billion Dollar Raising

Embattled Chinese e-commerce giant Alibaba Group will this week look to commence raising between US$5 to 8 billion in a bond issue as it continues to be pressured by regulators and rival players.

First reported by Reuters, the company was expected to use the funds for general corporate expenditure including developing its overseas operations.  Alibaba had US$44bn in cash on its balance sheet at the end of September. It has also announced it would increase the value of a share buy-back program from $6bn to $10bn.

Co-founder Jack Ma’s empire has been the subject of intense regulatory scrutiny including its fintech affiliate Ant Group which late last year shelved its proposed $37bn market listing. It was expected to be the world’s biggest IPO in 2020. Ma had previously publicly criticised the country’s regulatory system.

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Regulators also announced an antitrust probe into Alibaba in December, investigating suspected abuse of its market power.

The environment of very low interest rates has seen companies tap into global bond markets where investors have been attracted to higher-yielding assets.

Alibaba Group has completed two international bond offerings – $8bn US dollar bond in 2014 and $7bn in 2017.

Alibaba had declined to comment on the proposed raising.