Tencent raises $6b in largest Asian corporate debt deal this year

Logos of Tencent are displayed at a news conference in Hong Kong, China March 22, 2017. REUTERS/Tyrone Siu

Chinese social media and gaming giant Tencent Holdings Ltd said on Thursday it raised $6 billion in a U.S. dollar bond sale – the largest debt deal by an Asian corporate in 2020.

The deal was finalised early on Thursday in which Tencent, raised $1 billion in five-year debt, $2.25 billion in 10-year, $2 billion in 30-year and $750 million in 40-year debt, a term sheet showed.

It was the first time Tencent, Asia’s second-most valuable company by market capitalisation, raised 40-year debt in its history.

Demand from investors reached $36 billion, according to two sources with direct knowledge of the matter.

The sources could not be named because the information was not yet public.

Tencent’s bond deal was underway during the New York trading session when U.S. Secretary of State Mike Pompeo said Hong Kong no longer warranted special treatment under U.S. law because of the growing Chinese influence on the city.

“When I saw that headline come up while the Tencent book was still open I thought to myself ‘is that going to be unhelpful?’ I thought it might have been, but it turned out that it didn’t have an impact,” said one banker, who declined to be identified and worked on the deal.

“I think the investor base around the world is having a more balanced approach to these issues then the headlines might lead you to think.”

The final pricing for each of the tranches was tighter than initially expected, according to term sheets circulated while the deal was being concluded.

The transaction was the largest by a non-financial company in the Asian region so far this year, data compiled by Refinitiv showed.

Before the Tencent deal, the biggest was a $4 billion junk bond by Scenery Journey in January and a $2.9 billion bond by Chinese state oil firm Sinopec on May 7, the data showed.

Around $712 billion has been raised by Asia Pacific corporates, not including Tencent’s latest deal, in 2020 which is the strongest start to a year on record, according to Refinitiv data.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.