Chinese tech conglomerate Alibaba (also the country’s largest e-commerce venture) has raised USD 5 billion in a dual-currency bond, the biggest deal of its kind in Asia-Pacific in 2024. A total of 17 billion yuan (USD 2.35 billion) in offshore yuan-denominated bonds and USD 2.65 billion in US dollar-denominated notes were offered by the company.
The dollar tranche included 30-year, 10-year, and 5-year bonds. A term sheet obtained by Reuters showed that the final pricing was 25 basis points lower than what was initially announced to investors.
There were three different coupon rates on the dollar bonds: 4.875% for the five-year bond, 5.25% for the 10-year bond, and 5.625% for the longer-dated bond.
Additionally, the pricing of offshore yuan bonds was much tighter for the three-year, five-year, 10-year, and 20-year tranches.
Alibaba plans to use the notes’ net proceeds for share repurchases and other general business uses, such as paying off its offshore debt.
The deal is the largest corporate bond in Asia-Pacific in 2024 and the first time the company has entered the dollar bond market since 2021, according to data compiled by LSEG.
After finalising the deal, book-runners reported that global investor demand for the dollar bonds reached USD 14.06 billion.
According to the message, investors from Asia-Pacific purchased the majority of the dollar bonds in each tranche.
Reuters had earlier reported that the US dollar tranche would consist of 5.5-year, 10.5-year and 30-year bonds, citing a term sheet. The report said Alibaba was also working on a 3.5-year, five-year, 10-year and 20-year offshore yuan tranche.
Despite a 2% decline in Hong Kong trading, the company’s shares are up 11.4% so far this year.
Meanwhile, Alibaba unveiled an artificial intelligence-powered search engine for small businesses in Europe and the Americas to source supplies.
The latest innovation is seen by investors as an attempt to leverage ChatGPT-like tech to increase sales. Initial tests showed businesses’ purchase intent using the new tool increased by 40% versus traditional search engines, according to Kuo Zhang, president of Alibaba.com and vice president of Alibaba International.
“The product is called Accio, after the spell used in the Harry Potter fantasy series for summoning objects. The initial version is web-based and supports English, German, French, Portuguese and Spanish,” the Chinese tech conglomerate informed the media further.
“With a few text or image prompts, businesses can use Accio to find wholesale products — including analysis on their popularity with consumers and projected profit,” reported CNBC which was present during the product demonstration.
Some examples shown during the Beijing event included helping a sports entrepreneur build a line of pickleball products. The AI-powered search tool also listed several procurement options for the business to discuss directly with each supplier. The tech reportedly uses generative AI from Alibaba’s Tongyi Qianwen large language model.
Accio uses data from 50 million businesses on Alibaba International’s platform, and publicly available industry information, apart from incorporating one billion product listings and documents covering industries across more than 100 markets from Alibaba.com, the company’s business-to-business platform which sells to companies outside China.
Alibaba’s international arm in October 2024 announced an updated version of an AI translation tool to help merchants reach customers in other countries, while claiming the tech’s translation capabilities beat that of Google and ChatGPT.
Going all guns blazing on the AI front, Alibaba also played a crucial role behind Chinese augmented reality (AR) start-up Rokid launching its latest product: a new pair of lightweight smart glasses, as the tool reportedly employs the tech conglomerate’s large language model (LLM).
The start-up, founded by former Alibaba employee Misa Zhu Mingming, announced the LLM-equipped AR glasses on November 18. The company has chosen Alibaba’s LLM as it has recently been ranked highly in global performance benchmarks. The glasses aim to compete with Meta head-on, eyeing profitability in 2025.