PDD - Alibaba To Raise $4.5B Through Convertible Bonds For Share Buybacks Amid Fierce Competition Slow Recovery | Benzinga
In a bid to fund share repurchases, Alibaba Group Holding Ltd (NYSE:BABA) has announced a $4.5 billion convertible bond issue. This move comes amid increasing competition and a sluggish Chinese economic recovery.
What Happened: Alibaba plans to issue convertible senior notes maturing in seven years with a coupon of 0.5%, reported The Wall Street Journal. The deal size could reach $5.0 billion if the option to purchase additional notes is exercised in full.
The notes can be exchanged for shares at an initial conversion price of about $105.04 per American depositary share, a 30% premium over Thursday’s closing price of $80.80. Alibaba plans to repurchase about 14.8 million ADS.
Fitch Ratings has assigned an A+ rating to the notes, expecting Alibaba to spend $11 billion to $13 billion on share buybacks ...