HONG KONG, March 4 (Basis Point) - Chinese e-commerce giant
Alibaba Group is back in the loan market with an eye on a jumbo
financing of up to $8 billion to refinance existing debts,
barely a year after borrowing $4 billion in loans, according to
The borrower is said to have approached lenders seeking
proposals for the loan, proceeds from which will refinance
US$4bn in loans put in place last year as well as fund Alibaba's
obligations under a $7.1 billion share buyback deal it struck
with Yahoo Inc last May.
The Chinese internet company is refinancing its outstanding
loans with a new borrowing to free itself from covenants that
capped its borrowings to $4 billion.
The additional $4 billion it is raising from the latest
borrowing will finance its share buyback deal with Yahoo.
As reported earlier, the buyback, agreed by Alibaba and
Yahoo on 21 May 2012, will cost $7.1 billion and will be funded
by $6.3 billion in cash and $800 million through a new issue of
preferred stock by Alibaba to Yahoo.
Sources expect Alibaba to pay lower pricing than on its
loans signed last year, which were well received.
The $4 billion in loans completed last year comprised a $1
billion four-year facility signed in July by eight banks and
three other loans of $1 billion each signed in June.
The three other loans include two bilaterals of three and
four years from China Development Bank (CDB), and a $1
billion three-year facility from a group of 19 lenders. The
three-year facility from 19 banks was part of a $3 billion
dual-tranche debut which also comprised a $2 billion bridge that
was taken out by CDB's bilaterals.
The $1 billion three-year loan from the 19 banks paid a
top-level upfront fee of 300 basis points, while the $2 billion
12-month bridge paid 175 basis points.
The $4 billion in loans last year funded the privatisation
of Hong Kong-listed Alibaba.com and financed the buyback of half
of the 40 percent stake Yahoo held in Alibaba.