Reported 5 months ago
Alibaba Group Holding Ltd. has issued a record $4.5 billion in convertible bonds, the largest dollar-denominated sale by an Asian company, to fund share buybacks and investments in areas like artificial intelligence. The notes, due in 2031 with a coupon of 0.5% and a 30% conversion premium, were oversubscribed about six times, attracting interest from 250 investors. This move allows Alibaba to take advantage of low financing costs and its stock rally, signaling its belief that its shares are undervalued and providing offshore cash for immediate buybacks while reducing dilution risk through a specific mechanism embedded in the bonds.
Source: YAHOO