Chinese smartphone maker Xiaomi said to clinch $1b loan at cheapest rate ever

A "MI" logo stands outside the main entrance of the Xiaomi Corp. headquarters in Beijing, China. Photographer: Edmond Lococo/Bloomberg

Xiaomi Corp. is returning to the loan market after a two-year absence with a $1 billion refinancing facility.

The Chinese smartphone maker is in early discussions with lenders for a five-year bullet club loan at an all-in rate of low to mid 100 basis points area over Libor, according to people familiar with the matter.

That could mark Xiaomi’s cheapest loan in the market with its longest tenor, according to Bloomberg-compiled data. A Xiaomi representative declined to comment when contacted by Bloomberg.

Some of the bigger borrowers in the region are benefiting from lower costs thanks to ample liquidity in the loan market amid a 13% slump in volume so far this year.

Last month, Chinese social media giant Tencent Holdings Ltd. clinched its biggest and cheapest ever dollar-based facility.

The refinancing facility comes as Xiaomi faces earnings headwinds amid a slowing Chinese economy worsened by the U.S.-China trade war. The company announced plans earlier this month to spend as much as HK$12 billion ($1.5 billion) buying back its own stock.

The latest loan is expected to be borrowed via Xiaomi Best Time International Ltd., and guaranteed by Xiaomi Corp., said the people, who aren’t authorized to speak publicly and asked not to be identified. It last came to the loan market in 2017 with a three-year facility of similar size.

The loan then was secured at an all-in pricing of 250 to 260 basis points via margin of 215 basis points over Libor. Xiaomi sought lenders’ consent in August last year to slash the margin of the loan by 60 basis points to 155 basis points over Libor.

Bloomberg

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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).

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  • 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.