Goldman Sachs to lend US$500m to Alibaba ahead of expected IPO
Goldman Sachs Group will lend US$500 million to Alibaba Group as the company seeks to arrange US$8 billion of loans, two people familiar with the matter said.
The New York-based investment bank pledged funds to the facility for China's biggest e-commerce company, proceeds of which would partly be used to refinance debt at a lower cost, the people said on Tuesday, asking not to be identified because the details are private. Alibaba has set tomorrow as response deadline for banks.
Alibaba is rolling out a smartphone operating system and buying a stake in the country's biggest Twitter-like service - steps considered a prelude to an initial public offering that may value the company at as much as US$100 billion.
Chief executive Jonathan Lu, who took over from founder Jack Ma Yun last month, is refocusing on mobile platforms to replicate its dominance with desktop computer users.
John Spelich, a Hong Kong-based spokesman for Alibaba, said he had "no comment on speculation regarding who may have joined the syndication", when asked about the company's financing plans.
The financing offers so-called blended all-in rates of 314 basis points, 307 basis points and 300 basis points more than the London interbank offered rate for pledges of US$500 million, US$300 million and US$200 million respectively, the people familiar with the matter said.
The debt is split into a US$4 billion five-year term loan, a US$2.5 billion three-year term facility and a US$1.5 billion similar-maturity revolving credit line.
Australia & New Zealand Banking Group, Citigroup, Credit Suisse Group, DBS, Deutsche Bank, HSBC Holdings, JP Morgan Chase, Mizuho Corporate Bank and Morgan Stanley were hired to help arrange the loan and have been marketing it to a wider group of banks in syndication.
Banks are keen to form relationships with Alibaba to increase their chances of being selected to help the company with its share sale.
Goldman is the top-ranked arranger of global equity offerings this year with a 13 per cent market share.
Citigroup is ranked second with an 8.7 per cent share, followed by Morgan Stanley with 7.9 per cent.