SHANGHAI – Chinese e-commerce giant Alibaba will issue corporate bonds worth $7 billion with a maturity period of up to 40 years, the firm said in a statement on Thursday.
The company, which expects to close the deal on Dec. 6, had announced early this week that it would offer the bonds in United States dollars with which it expects to obtain funds for general corporate purposes.
According to various media sources investors’ demand for the purchase of these bonds amounted to $41 billion.
The money obtained will be used for general corporate purposes, including the needs of circulating capital, debt repayment outside China, and possible acquisitions or investments in complementary businesses.
Alibaba already carried out a similar operation in 2014, with an offer for $8 billion, making the current move its second visit to the debt market in the last three years.
From the public offer, a total of $700 million will be bonds with 2.8 percent interest maturing in 2023 at a bond issue price of 99.853 percent of its nominal value, while $2.55 billion will be issued at 3.4 percent with maturity in 2027 at the bond issue price of 99.396 percent.
In addition, another $1 billion will be issued at 4 percent and maturing in 2037 at 99.863 percent; $1.75 billion at 4.2 percent with maturity in 2047 at a price of 99.831 percent and $1 billion at 4.4 percent with maturity in 2057 at a price of 99.813 percent.