Tencent Holdings Ltd (騰訊) is planning to raise about US$5 billion through a US dollar bond sale today, people familiar with the matter said.
China’s social media leader received an issuance quota of US$6 billion from the Chinese National Development and Reform Commission, said the people, who were not authorized to speak publicly and asked not to be identified.
Once priced, it could become the biggest US dollar bond offering in Asia excluding Japan so far this year, data compiled by Bloomberg showed.
Tencent declined to comment in an e-mailed statement.
It plans to use about US$3 billion of the new bond proceeds to retire maturing debt, including US$2 billion notes that are due next month, a company executive said in an investor call yesterday.
Tencent last came to the US dollar bond market in January last year, when it priced US$5 billion for a four-part offering.
The spread over treasuries on those bonds has risen since pricing, with the premium on its 10-year tranche up by about 35 basis points.
Tencent is recovering from a bruising year of regulatory crackdowns as game approvals slowly resume.
The company missed the mark on its earnings in the December last year quarter by the most in a decade.
To weather slowdowns in its core business and the economy, the owner of WeChat (微信) is spending billions to sustain growth with investments in everything from cloud and entertainment to retail.
Tencent’s executives said during an earnings call last month that the company plans to continue to spend big for content acquirement and production as it locks horns with Alibaba Group Holding Ltd (阿里巴巴) and iQiyi Inc (愛奇藝) for viewer time.
The WeChat operator in September last year overhauled its structure to capture opportunities in what founder Pony Ma (馬化騰) brands the emergence of an “industrial Internet.”
It set up a cloud and smart industries division to spearhead its investments in areas from retail, connected cities and security to education, manufacturing and healthcare.
The spending spree is diversifying its revenue makeup.
The company has hired Deutsche Bank AG, HSBC Holdings PLC, Goldman Sachs Group Inc and Morgan Stanley to arrange fixed income investor calls from yesterday.
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