As the Game is Getting Bigger, Tencent Writes the Largest Asia Technology USD Bond

Chinese tech giant Tencent Holdings Ltd has completed a $2.5 billion dual-tranche bond sale in the US on April 22, making it the firm’s largest U.S. debt deal to date. This is also the largest ever tech bond from Asia (ex-Japan) and the largest offshore bond sale by Chinese companies that are not state-owned.

The deal is part of the companies medium-term notes (“MTN”) program established earlier this month to enabling it to issue up to $5 billion in bonds over the next year, providing a more flexible financing scheme for its potential buyouts in the further. The deal splits into 3-year and 5-year tranches.

According to a source close to the deal, one of the key objectives of the MTN program is to attract US investors, particularly long-term buy-and–hold asset managers. Luckily, the holistic marketing efforts of Tencent in the past few months has largely paid off, with 2/3 of the 5-year bonds sold to US-based funds, and 80% of the smaller 3-year deals.

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