Tencent raises US$6 billion in bond sale

Chinese tech giant Tencent on Thursday said in a regulatory filing it has raised US$6 billion in a bond sale and the group will use the proceeds for refinancing and general purposes.

The sale makes it the largest dollar bond sale in Asia this year, far surpassing the US$2.8 billion issue from property developer China Evergrande Group in January, according to Refinitiv data. The notes are expected to be issued on April 11.

Following the announcement, Tencent’s shares slid 1.01% or HK$3.80, at HK$374.20 at around 11.30am Hong Kong time.

The social media and gaming firm said it sold US$1.25 billion in fixed rate five-year notes, US$0.75 billion in floating rate five-year notes, US$3 billion in 10-year notes, and two sets of US$500 million notes separately in seven-year and 30-year notes, it said.

The bonds will carry coupons ranging between 3.280% to 4.525%. For example, for the 30-year notes, the coupon is at a rate of 4.525%.

Tencent last launched a US$5 billion bond 15 months ago.

Deutsche Bank, HSBC, Goldman Sachs, and Morgan Stanley are the joint global coordinators for the latest bond sale.

A rough 2018 as China’s gaming regulator froze out on approving new games to combat gambling addiction

The tech company faced a rough year last year, due to the nine-month long hiatus from China’s gaming regulator in approving games for monetization to curb gaming addiction.

Investors were unnerved by a lack of approval from Chinese regulators on the games from Tencent, causing the group to lose over 20% of its market value in the nine-month period.

In January, China’s regulators approved two of Tencent’s mobile games, which allowed investors to heave a sigh of relief from the dry spell. The firm’s net profit for the last quarter of 2018 fell by 32%, the largest plunge since it got listed in 2004, due partly to one-off losses from its portfolio companies.

Since the regulatory approval announcement in January, the firm’s shares have to-date risen by 9%.