Alibaba Completes Issuance of Convertible Senior Notes

TapTechNews May 30th, Alibaba Group announced in the Hong Kong Stock Exchange that it has completed the issuance of convertible senior notes.

Alibaba stated that the company has submitted form 6-K to the US SEC, regarding the completed private placement of convertible senior notes with a total principal amount of 5 billion US dollars (about 36.3 billion yuan currently) due in 2031 with an interest rate of 0.50%, including the right of the initial purchasers to fully exercise the option to purchase additional notes with a maximum principal amount of 500 million US dollars (about 3.63 billion yuan currently).

Alibaba's US stocks closed at 79.06 US dollars per share today, with a market capitalization of 191.182 billion US dollars (TapTechNews note: about 1.39 trillion yuan currently).

According to the introduction, the annual interest rate of this convertible senior note is 0.25% to 0.75%, with a term of seven years and is not redeemable in the first five years. The terms show that these notes will have a conversion premium of 30% to 35%.

Previously on May 21st, JD.com also announced plans to issue convertible bonds. The market expects that subsequent companies such as Meituan and Tencent may also follow suit to issue similar convertible bonds.

Alibaba stated in the announcement that it plans to use the net proceeds from the note issuance for: at the same time as the note issuance pricing, to repurchase a number of Alibaba American Depositary Shares according to the existing share repurchase plan; to provide funds for further share repurchases carried out from time to time according to the company's existing share repurchase plan; to provide funds for the cost required to enter into capped call transactions.