Alibaba Seeks To Raise $5B In US Dollar Debt Offering This Week

Alibaba Group Holding Ltd BABA is planning to raise $5 billion by selling dollar-denominated bonds this week, Reuters reported Wednesday (Shanghai-time). 

What Happened: The book for the offering will open on Thursday and the deal is expected to be priced on the same day, a person familiar with the matter told Reuters.

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“They monitor the markets very closely and they have elected to go now. It’s Alibaba, they will get it done. We have been waiting for this transaction to come for a long time now,” the person told Reuters.

The offering is expected to have maturities of up to 40 years and may include a tranche of sustainability notes due in 2041, according to a terms sheet seen by Reuters.

Citigroup Inc C, Credit Suisse Group AG CS, Morgan Stanley MS, JPMorgan Chase & Co JPM, and China International Capital Corporation Limited CNICF are acting as joint bookrunners for the proposed offering.

Why It Matters: On Tuesday, Alibaba released its results for the quarter ended December with EPS at RMB 22.03 ($3.41) beating the RMB 20.87 ($3.23) estimated by analysts.

Investor response to the latest offering would be a litmus test of sentiment towards the Jack Ma-founded company, which has been grappling with a regulatory backlash.

In January, it was reported that the company planned to raise $5 billion, but it could raise up to $8 billion if investor response was favorable.

The funds are expected to be used for general corporate purposes.

Alibaba-backed Ant Group’s $37 billion IPO was scuttled by China’s President Xi Jinping last year.

Ma has been keeping a low profile since Oct. 24 when he criticized China’s regulators ahead of the Ant IPO. The entrepreneur resurfaced last month. 

Price Action: Alibaba shares closed 3.85% lower at $254.50 on Tuesday and gained nearly 0.7% in the after-hours session.