JD.com weighs raising 10 billion yuan in debut dim sum bond sale
Dim sum bonds are attractive to some Chinese tech firms because of their lower financing costs
JD.COM is considering its first dim sum bond sale, with a potential offering that could raise about 10 billion yuan (S$1.8 billion), according to sources familiar with the matter, joining a slew of Chinese e-commerce companies looking to lock in cheap funding as competition intensifies.
The offshore yuan-denominated notes would mature within 10 years, the sources said, asking not to be identified as the matter is private. JD’s considerations are preliminary and may change, while details, including timing of the potential offering, haven’t been decided, the sources added.
A JD.com media representative said in response to a Bloomberg inquiry that the company has no plans to issue such bonds at this stage and “does not comment on market rumours or speculation”.
E-commerce companies such as Alibaba Group Holding and Meituan have been piling into the dim sum bond market to help finance their business expansions as a price war rages in China’s food delivery sector. Many Chinese tech companies are also turning to the offshore bond market for funding to help drive their pivot towards artificial intelligence (AI).
Dim sum bonds are attractive to some Chinese tech firms because of their lower financing costs. Three-year dollar bonds issued by Chinese investment-grade firms carried an average coupon of around 5.1 per cent last year, while comparable yuan-denominated bonds offered yields of around 3.8 per cent, according to Bloomberg-compiled data.
In October, Meituan priced about seven billion yuan of dim sum bonds. That followed similar offerings by Tencent Holdings and Baidu, which together sold 23.4 billion yuan of offshore yuan bonds last year, the largest tally for the sector ever. Alibaba, meanwhile, priced 17 billion yuan of offshore yuan debt in late 2024.
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TikTok peer Kuaishou Technology, which has made strides into the field of AI-generated video, is also considering a maiden offshore bond sale and is working with investment banks on a potential deal.
Separately, JD.com has also sought to raise at least US$1 billion through an equity-linked bond sale, sounding out investor interest for the potential sale of bonds exchangeable into shares of JD Health International, its Hong Kong-listed online health-care arm. BLOOMBERG
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