Baidu raises US$1 billion from first green bonds as the Chinese tech giant works towards 2030 carbon neutral goal

The bonds comprise two tranches – US$300 million maturing in 2027, and US$700 million in 2031, which have been rated ‘A3’ by Moody’s and ‘A’ by Fitch

The bonds were oversubscribed five times, with Baidu planning to use the proceeds to fund green data centres and research into electric ‘robocars’

Reading Time:2 minutes

Men interact with a Baidu AI robot at its headquarters in Beijing. Photo: Reuters

Published: 5:42pm, 19 Aug 2021Updated: 10:42pm, 19 Aug 2021

Baidu has raised US$1 billion from its first US dollar sustainable bonds, as the Chinese search engine and artificial intelligence giant tapped strong investor demand for green notes, taking it one step closer to achieving its goal of becoming carbon neutral by 2030.

The debt offering comprises a US$300 million tranche maturing in 2027, and a US$700 million tranche maturing in 2031. Both senior unsecured notes, rated “A3” by Moody’s and “A” by Fitch, were priced at much tighter credit spreads than the initial price guidance given to investors on Tuesday, indicating strong demand.

The green bonds were oversubscribed five times, according to a person familiar with the transaction. This comes despite the heightened regulatory scrutiny of Chinese tech firms that has sent Baidu’s Hong Kong-listed shares 30 per cent lower since July.

“We are seeing a trend for many Chinese tech companies working to green up their operations,” said the person. “From a demand perspective, over the past 12 months we are seeing the vast majority of fund managers offering portfolios dedicated to green projects.”

Baidu CEO Robin Li (right) unveils a robocar prototype at the annual Baidu World conference on Wednesday. Photo: Handout

It was the Beijing-headquartered company’s third US dollar bond offering in 19 months, after tapping the market in January and June last year to raise more than US$1.9 billion, data from Refinitiv shows.

The bond sale came a day after Baidu unveiled a “robocar” electric vehicle prototype on Wednesday, which chief executive Robin Li envisioned would replace cars clogging the roads today. Chinese companies like Baidu are taking advantage of the low-interest rate environment to tap funding to back their research and development of next-generation technologies that hold the promise of helping Beijing achieve peak emissions before 2030, and net zero emissions by 2060.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x