Xiaomi Tests Appetite for Potential Debut Dollar Bond

(Bloomberg) -- Xiaomi Corp. kicked off a global roadshow to gauge appetite for a potential offering of its first dollar bond.

The Chinese smartphone maker hired several banks to hold investor conference calls about a potential dollar bond beginning Monday, according to a person familiar with the matter, who is not authorized to speak publicly and asked not to be identified.

A sale would be Xiaomi’s maiden dollar-denominated offering, after the Beijing-based firm priced its first bond deal in the domestic market earlier this month, Bloomberg-compiled data show. The company was classed investment grade by the three international credit rating firms.

Xiaomi, in response to a Bloomberg query, said it doesn’t comment on market rumors or speculation, and referred to its company statement Monday that proceeds from the bond will be used for general corporate purposes and to repay borrowings.

“Xiaomi’s Baa2 issuer rating reflects its fast-growing consumer brand, its globally competitive scale, the recurring revenue and customer loyalty stemming from its internet services, as well as its prudent financial policy,” Gerwin Ho, an analyst at Moody’s Investors Service, wrote in a report Monday.

China’s primary offshore bond market has struggled to get back on its feet after a global shortfall of dollars saw issuance dry up in March. The market has been open to a handful of investment grade or state-owned Chinese firms since then, with another tech giant Baidu Inc. pricing $1 billion of bonds earlier this month.

Xiaomi last month reported profit that beat analysts’ estimates thanks to robust growth in internet services and overseas business in the quarter before the start of the coronavirus pandemic.

The company said smartphone sales rebounded quickly in late March, underpinning resilient consumer demand. It warned however that the full impact of the pandemic on its international sales -- now about half its business -- won’t emerge till the second quarter.

©2020 Bloomberg L.P.

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