Tencent Holdings saw its Hong Kong-listed stock advance after investor demand for a proposed dual-currency bond offering outstripped the company's target volume.
Shares in the technology group rose as much as 5% to HK$468.4 by 04:22 GMT on the day the orderbooks were released, reflecting immediate market interest while the deal was being marketed.
Orderbook information showed combined bids for Tencent's offshore yuan-denominated bonds exceeded 20.5 billion yuan, which equates to about $3.02 billion, and demand for its U.S. dollar bonds topped $3 billion. Taken together, those bids surpassed $6 billion in investor orders against a planned raise of about $4 billion.
The company is marketing multiple tranches across the two currencies: two offshore yuan issues with 10-year and 30-year maturities, plus two dollar-denominated notes with 10-year and 20-year terms. Initial price guidance for the dollar notes was indicated at 80 basis points and 90 basis points over U.S. Treasuries for the 10-year and 20-year pieces, respectively.
Term sheets associated with the offering state that net proceeds will be used for general corporate purposes, which include refinancing existing indebtedness. The issuance size being marketed and the stated use of proceeds were presented as part of the documentation for potential investors.
The oversubscription highlights notable demand for Tencent's liability management while the company seeks to access both offshore yuan and U.S. dollar debt markets through staggered maturities. Market reaction to the orderbook and pricing guidance was reflected in the intraday share move seen in Hong Kong.
Summary
Tencent attracted more than $6 billion of investor orders for a planned dual-currency bond offering targeted to raise about $4 billion. Bids for offshore yuan paper topped 20.5 billion yuan and demand for U.S. dollar notes exceeded $3 billion. The package includes 10- and 30-year offshore yuan bonds and 10- and 20-year dollar notes, with initial dollar guidance at 80 and 90 basis points over Treasuries. Proceeds are earmarked for general corporate purposes, including refinancing existing debt.