According to Bloomberg, people familiar with the matter said that ByteDance is seeking a US$9.5 billion loan from banks, which would be the largest US dollar-denominated corporate loan project in Asia (excluding Japan). Citigroup, Goldman Sachs and JPMorgan Chase are acting as coordinators for ByteDance’s latest financing, people familiar with the matter said. The loan has a term of three years and can be extended to up to five years.
Part of the loan will refinance an existing $5 billion two-part loan. The funds will also be used for working capital purposes, people familiar with the matter said. In 2021, ByteDance’s loan is US$5 billion, divided into two parts: regular and revolving parts.
ByteDance’s new loan includes an over-allotment option, which will allow the loan size to exceed $9.5 billion. The loan's initial spread is the U.S. dollar overnight benchmark rate plus 85 basis points.
ByteDance’s loan size exceeds previous expectations, indicating that the company is actively taking advantage of favorable conditions in Asia’s loan market. Asian loan markets have ample liquidity amid sluggish deal flows. According to data compiled by Bloomberg, dollar loan volume in Asia (excluding Japan) fell 44% to about $45.5 billion in the first half of this year, excluding bilateral loans, the lowest level since 2010.
Currently, ByteDance is seeking to expand from its core online advertising business into areas such as e-commerce and generative artificial intelligence.In China, many large technology companies have invested billions of dollars in developing large language models and chatbots like ChatGPT, and ByteDance is one of them. Overseas, TikTok, owned by ByteDance, plans to promote its niche live streaming shopping platform to more European markets after achieving initial success in the United States.
As of press time, ByteDance has not commented.
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