Tencent to raise US$1.27 billion in first dim sum bond offering as it joins AI race
Tencent takes advantage of the Hong Kong bull run to raise funds in 5-, 10- and 30-year tranches for its AI war chest
Chinese technology giant Tencent Holdings plans to raise 9 billion yuan (US$1.27 billion) through a yuan-denominated dim sum bond – its first bond sale in four years – in a move brokers say is aimed at boosting its artificial intelligence ambitions.
The dim sum bond, offered in three tranches with 5-, 10-, and 30-year tenures, will be launched on September 23, according to a stock exchange filing on Wednesday. Dim sum bonds are bonds that are denominated in yuan and issued outside the mainland
The offering aims to raise 2 billion yuan by issuing five-year notes with a 2.1 per cent coupon, and will tap 6 billion yuan by selling 10-year notes carrying a 2.5 per cent coupon. The firm will also raise a further 1 billion yuan with 30-year notes, paying a 3.1 per cent coupon.
Tencent, which runs the world’s largest gaming business and China’s social media platform WeChat, said the proceeds would be used for general corporate needs. It did not provide further details.
The move marks Tencent’s debut in the dim sum bond market and comes amid heightened fundraising by Chinese tech giants investing heavily in AI development, including Alibaba Group Holding and JD.com.
Alibaba, which owns the Post, last week raised US$3.2 billion by selling zero-coupon convertible senior notes, part of moves to fund its cloud and international e-commerce operations.