Abstract:
Tencent Holdings has completed the pricing of four US dollar and offshore RMB bonds, and plans to issue unsecured senior notes totaling US$1.8 billion and RMB26 billion, which is equivalent to approximately US$5.7 billion based on the current exchange rate. Tencent said that after deducting underwriting fees, discounts and commissions, the US dollar notes are expected to net raise approximately US$1.79 billion and the RMB notes approximately 25.89 billion yuan. The proceeds will be used for general corporate purposes. The bonds are expected to be issued on October 21 and are planned to be listed on the Hong Kong Stock Exchange.
The U.S. dollar bonds include a 10-year note with a principal amount of US$1.3 billion and an annual interest rate of 6.10%, and a 20-year note with a principal amount of US$500 million and an annual interest rate of 6.75%; both mature in 2036 and 2046 respectively. Offshore RMB bonds include 10-year notes with a principal amount of 20 billion yuan and an annual interest rate of 2.40%, and 30-year notes with a principal amount of 6 billion yuan and an annual interest rate of 3.00%, maturing in 2036 and 2056 respectively. All four bonds are fixed-rate.
Reuters quoted the updated terms document as saying that the total amount of US dollar bond subscription orders exceeded 7.4 billion US dollars, and the offshore RMB bond orders exceeded 105 billion yuan, and the total order size exceeded four times the final issuance amount. The final interest rate spreads of U.S. dollar bonds were 90 basis points and 115 basis points higher than those of U.S. Treasury bonds of the same maturity, narrowing 25 basis points from the initial guidance; the final interest rates of RMB bonds were lowered by 50 basis points respectively from the initial guidance.
This financing occurs as Tencent increases its investment in artificial intelligence. The company disclosed that capital expenditures in the first half of 2026 reached 96.3 billion yuan, more than double the 45.9 billion yuan in the same period last year. The expenditures mainly involved computing equipment, software and data centers. However, Tencent summarized the purpose of this fundraising as general corporate purposes in its issuance documents, and did not indicate that all funds will be invested exclusively in AI projects.
Tencent raised approximately US$4.66 billion through US dollar bonds and RMB bonds in June this year. This time it entered the overseas bond market again in a short period of time, reflecting that large technology companies can still obtain financing, but investors are also paying more attention to AI infrastructure investment and capital costs. Tencent President Liu Chiping said that the issuance was actively subscribed, reflecting investors' recognition of the company's new round of AI business and core business status; the company also said that the issuance of dual-currency bonds will help broaden the bond investor base and optimize the debt maturity structure.
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