Veriton Investment

Tencent Markets First Bond Sale Since 2021 With Dim Sum Notes

(Bloomberg) -- Tencent Holdings Ltd. began marketing its first bond sale in four years, joining a wave of borrowing among Chinese tech firms as competition intensifies in a quickening global AI race.

The Chinese internet giant is looking to sell five-year, 10-year and 30-year offshore yuan denominated notes, with initial price guidance at 2.6%, 3% and 3.6% areas, according to a person familiar with the matter. The deal could be priced as early as Tuesday, said the person.

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If successful, it would be Tencent’s first-ever sale of dim sum notes and its first bond offering in any currency since April 2021, according to data compiled by Bloomberg. The newly priced securities would add to Tencent’s existing $17.75 billion in outstanding notes.

Proceeds from the proposed senior unsecured bonds would be used for general corporate purposes, the person added. Tencent has a $1 billion note due in January 2026 and a $500 million security maturing in April next year, Bloomberg-compiled data show.

The debt offering comes amid increased fundraising activity in China’s technology sector, as companies invest billions in artificial intelligence capabilities. Total capital expenditure by major Chinese internet firms such as Alibaba Group Holding Ltd., Tencent, Baidu Inc. and JD.com Inc. is set to hit $32 billion in 2025, more than doubling from $13 billion in 2023, according to a Bloomberg Intelligence report.

Alibaba raised about $3.2 billion just last week in the largest convertible bond offering of the year.

Meanwhile, Baidu recently raised 4.4 billion yuan ($618 million) from a dim sum bond offering, following a 10 billion yuan issuance in March. Chinese food delivery and retail services company Meituan is also considering a potential dim sum bond sale.

(Updates with chart)