Investors are beginning to question whether Alibaba Group Holding could pull a jumbo dollar bond in the coming weeks, given the Trump administration’s bitterness over Chinese companies amid co-founder Jack Ma and uncertainty.
A potential sale of $ 8 billion in offshore loans was planned earlier this week; However, a marketing memorandum has not yet been received by potential investors, according to people familiar with the matter, who are not asked to identify as they are not authorized to speak publicly. A spokesperson for Alibaba did not immediately comment on the progress of the sale.
This silence is prompting investors to question whether the e-commerce giant will move ahead with sales at an increasingly challenging time. Reports of a possible US investment ban this week prompted Alibaba to expand its wide spread over a few dollar notes in six months, Bloomberg-compiled prices show. And with the leadership of President Elect Joe Biden days, there is a good case until his China policy becomes clear.
“If I had been an underwriter, I would have waited until the Biden Administration arrived and might have been treated more with China,” said Geoff Marshall, who runs the fixed income team at Signi Global Asset Management, CI Global Asset Management. C $ 30 billion ($ 24 billion) under management.
The Trump administration has taken a number of steps against Chinese companies, including restricting apps from Alibaba affiliate Ant Group and Tencent Holdings. Bloomberg reported on Thursday that US officials deliberately decided against banning US investment in Alibaba and Tencent and removed uncertainty clouds over Asia’s two largest corporations. According to Credit Traders, Alibaba’s dollar bond rose 8 basis points on Thursday morning.
A debt sale of this magnitude would have been a demonstration of strength for the company, indicating global investor confidence and confirming a major channel of funding for the firm. Bloomberg previously reported that the global loan offering was set for at least $ 5 billion, but could exceed $ 8 billion depending on the reception. This would coincide with Alibaba’s record-setting debut in 2014, the largest offshore bond sale by a Chinese issuer.
Mr Ma has not been seen publicly since his internet empire was hit with a growing antitrust crackdown and suspension of the Ant Group’s $ 35 billion IPO, while he put regulators too focused on risk and stifling innovation Cast to. His absence from a public view may already make potential investors worried about the storm that has affected one of China’s most powerful corporations.
“At the moment, this is not something we will participate in given uncertainty about the actions of the Chinese regulator in the region, Jack Ma’s recent criticism of China’s bureaucratic system and how the government will respond to it,” Alejarjo Arvalo he said. EM’s Fixed Income in Jupiter Asset Management. “There are too many unknowns.”
Ant’s planned IPO – which would have been by far the largest in the world – was scattered and government regulators have sent investigators to its major e-commerce company.
Speculation about Mr Ma’s whereabouts increased when the country’s most high-profile billionaire missed a recent taping of his own television show, though Alibaba attributed his absence to “conflicting schedules”. This led to drawing parallels with other falling tycoons such as Wu Xiaoyuhi of Engbang Insurance Group and Xiao Jianhua of Tomorrow Group, which were likely to break up their corporate empires before their disappearance.
According to a person aware of the case, these concerns are high, stating that Mr. Ma decided to stay out of public view himself. The billionaire is cooperating in Alibaba’s investigation into Alibaba and at the same time according to the government’s directive to thwart online speculation on the investigation, the person said.
Should Alibaba go ahead with the marketing of bonds, the company may still be able to generate “considerable demand”, according to Bloomberg Intelligence analysts Robert Schiffman and Suborna Panza, Alibaba’s credit profile “has never been stronger”.
“Everything costs money,” said Georges Geddon, chief investment officer of Antler Capital Partners, a credit fund in London. It has to be made juicy, but Alibaba is here to stay. “China will never destroy its tech champion.”
(Except for the headline, this story has not been edited by NB staff and published from a syndicated feed.)