Tencent Plans to Acquire $1.27 Billion through Initial Dim Sum Bond Issue, Enters Competition in Artificial Intelligence Field
Tencent Holdings to Raise $1.27 Billion through Dim Sum Bond Sale
Chinese tech giant Tencent Holdings is set to make its debut in the dim sum bond market with a planned fundraising of 9 billion yuan ($1.27 billion). The dim sum bond offering, which will launch on September 23, 20XX, will be the company's first bond sale in four years.
According to a stock exchange filing, the offering consists of three tranches with 5-, 10-, and 30-year tenures. Tencent aims to raise 2 billion yuan by issuing five-year notes with a 2.1% coupon, 6 billion yuan by selling 10-year notes carrying a 2.5% coupon, and a further 1 billion yuan with 30-year notes, paying a 3.1% coupon.
The proceeds from the bond sale are aimed at boosting Tencent's artificial intelligence ambitions. Chinese tech giants, including Tencent, Alibaba Group Holding, and JD.com, have been heavily investing in AI development.
It is, however, unclear which banks will be involved in the issuance of Tencent's Dim Sum bond. The search results do not specify the participating banks.
Meanwhile, Tencent's rival Alibaba, which owns the Post, recently raised US$3.2 billion by selling zero-coupon convertible senior notes. The funds raised by Alibaba were part of moves to fund its cloud and international e-commerce operations.
The dim sum bonds are bonds that are denominated in yuan and issued outside the mainland. This method of fundraising allows issuers to tap into a broader investor base beyond China's domestic market.
This move by Tencent follows a trend among Chinese tech companies to raise funds for their ambitious growth plans. The funds raised will be used for Tencent's general corporate needs, providing the company with the financial resources to continue its growth trajectory.
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