Tencent Borrows $6 Billion in Largest 2019 Asia Dollar Bond

(Bloomberg) -- Tencent Holdings Ltd. sold a $6 billion, five-tranche dollar bond, making it the biggest dollar offering in Asia so far this year.

The WeChat operator priced the largest class of the offering, a $3 billion 10-year bond, at 1.45 percentage points more than the current 10-year Treasury, according to people familiar with the matter. The offering drew about $25 billion in orders from investors, the people said.

The company had an issuance quota of $6 billion from a Chinese regulator. The transaction beats China Evergrande Group’s $3 billion sale to become the largest dollar bond issuance in Asia excluding Japan this year, Bloomberg-compiled data show.

The Chinese internet giant plans to use about $3 billion of the new bond proceeds to retire maturing debt, including the $2 billion notes that are due in May, a company executive said in an investor call on Tuesday. It added a 30-year tranche for the first time. Tencent last came to the dollar bond market in January last year with a $5 billion deal in four parts, including a 20-year note.

“The market is keenly anticipating Tencent’s jumbo offering given the broader lack of investment grade China dollar bond supply this year in the offshore market and deluge of high yield bonds from property developers,” said Owen Gallimore, head of credit strategy at Australia & New Zealand Banking Group in Singapore. "Despite earnings being weak on rising costs as much as the gaming hit, Tencent is viewed as a strong benchmark IG position by global fund managers.”

To contact the reporter on this story: Carrie Hong in Hong Kong at chong61@bloomberg.net

To contact the editors responsible for this story: Neha D'silva at ndsilva1@bloomberg.net, Christopher DeReza, Rizal Tupaz

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