Alibaba is raising $5bn from issuing convertible bonds, calling into question the Chinese ecommerce group’s ability to tap its huge cash piles to repurchase shares.
The Hangzhou-based company on Friday said it was issuing $4.5bn of notes convertible into stock at $105.04 per share and due in 2031, with a 0.5 per cent coupon. The issuance includes a $500mn overallotment, which a person familiar with the matter said would be exercised.
The group said it would use the raised cash primarily to buy back shares at the current price of $80.80, fund future share repurchases, and enter into transactions to offset some of the dilution should its share price reach the convertible price.
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