China’s Tencent draws more than US$16 billion in orders for dual-currency bond

[SYDNEY] China’s Tencent Holdings has drawn more than US$16 billion in orders, around four times the amount it is seeking to raise, for a planned dual-currency bond, updated order book messages reviewed by Reuters showed on Tuesday (Jun 9).

The enthusiasm is in line with the global rush towards technology that has driven AI-linked stocks to record highs and also reflects the length of time since Tencent last issued a dollar bond.

Combined order books for the Chinese technology company’s 10-year and 30-year offshore yuan bonds exceeded 53.5 billion yuan (S$10.2 billion), the messages showed.

Orders for Tencent’s 10-year and 20-year dollar bonds exceeded US$8.5 billion, a separate orderbook update showed. Reuters reported on Monday, citing sources, that Tencent aimed to raise US$4 billion in the deal.

The company did not respond to a Reuters’ emailed request for comment on Tuesday and not all the orders will necessarily translate into funding.

Tencent shares ended 1.5 per cent higher on Tuesday.

Initial price guidance for the proposed 10-year dollar bond was US Treasuries plus 80 basis points while the 20-year dollar bond was US Treasuries plus 90 basis points, according to an earlier term sheet reviewed by Reuters.

Tencent set final price guidance for its 10-year offshore yuan bond at 2.5 per cent and its 30-year offshore yuan bond at 3.1 per cent, a new term sheet showed, versus initial guidance of about 2.95 per cent and 3.55 per cent respectively.

Tencent plans to use the proceeds for general corporate purposes, including refinancing, the term sheets showed.

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The company last turned to global bond markets for funds in September, when it raised 9 billion yuan from an offshore yuan bond. Before that, its last dollar bond was a US$4.15 billion issue in April 2021. REUTERS