Tencent raises $6B in Asia's biggest dollar bond sale this year

Agence France-Presse

Posted at Apr 04 2019 01:13 PM

A sign of Tencent is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China. Aly Song, Reuters/File

HONG KONG -- Chinese internet giant Tencent said Thursday it has raised $6 billion in the biggest dollar bond sale in Asia this year.

The social media and gaming behemoth confirmed the pricing in a filing to the Hong Kong stock exchange on Thursday with the biggest 10-year tranche of $3 billion priced at 3.975 percent.

Tencent also sold a five-year tranche of $2 billion in fixed and floating rate, $500 million in seven-year notes, and $500 million in 30-year notes.

The dollar bond offering marks the biggest sale in Asia excluding Japan so far this year, according to data compiled by Bloomberg News, when sources tipped the offering to raise around $5 billion earlier this week.

"The market is keenly anticipating Tencent’s jumbo offering given the broader lack of investment-grade China dollar bond supply this year in the offshore market and deluge of high yield bonds from property developers," Owen Gallimore, head of credit strategy at ANZ in Singapore.

"Despite earnings being weak on rising costs as much as the gaming hit, Tencent is viewed as a strong benchmark (investment-grade) position by global fund managers."

The notes are expected to be issued on April 11 and will take $15.5 billion in outstanding principal under the program.

Shenzhen-based Tencent is recovering from a government crackdown on the lucrative game sector last year and saw its plunging fourth-quarter profit miss estimates.

But China resumed game approvals in December and the company's shares have climbed more than 19 percent so far this year.

-- Bloomberg News contributed to this story --

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