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Tencent in talks with banks to borrow US$6 billion in Asia’s biggest syndicated loan for a Chinese firm since 2019
- Tencent’s five-year deal would pay an interest margin of 80 basis points over Libor and offer all-in pricing of 85 basis points, according to people familiar with the deal
- The proceeds are for general corporate purposes
Tencent Holdings, the creator of the messaging platform WeChat, is in talks with banks for a US$6 billion loan, according to people familiar with the matter.
That would be the biggest dollar loan syndicated in Asia for a Chinese firm since 2019, according to data compiled by Bloomberg. It would also mark a flurry of potential debt financing by tech giants after people familiar said earlier this month that rival Alibaba Group Holding was looking to sell up to US$8 billion of bonds.
Under the terms being discussed, Tencent’s five-year deal would pay an interest margin of 80 basis points over Libor and offer all-in pricing of 85 basis points, the people said, asking not to be identified as they aren’t authorised to speak publicly. The proceeds are for general corporate purposes, they added.
Tencent has in recent years spent billions of dollars buying stakes in promising start-ups, extending its reach in areas from social media to grocery delivery. It agreed last month to buy an additional 10 per cent of Universal Music Group. Other people familiar with the matter also said Friday that Tencent has received a €1.3 billion (US$1.6 billion) loan for that deal.
In addition, the company is locked in a fierce battle for users and advertisers against nemesis ByteDance, which runs TikTok. The WeChat operator is also pushing its gaming portfolios internationally, with hits like Call of Duty Mobile.
A representative with Tencent declined to comment.
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