(Bloomberg) — Chinese technology giant Baidu Inc. sold 10 billion yuan ($1.4 billion) of bonds outside of mainland China in its first debt issuance since 2021, according to a person familiar with the matter.
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The 7.5 billion yuan five-year and 2.5 billion yuan 10-year notes will carry a coupon rate of 2.7% and 3%, respectively, which is tighter than initial price guidance, the person added, asking not to be identified. The borrowing costs are also 10 basis points lower than the so-called dim-sum bonds sold by its peer Alibaba Group Holding Ltd. in November.
The deal is Baidu’s first-ever yuan-denominated note, according to data compiled by Bloomberg. The proceeds will be used for general corporate purposes, including repayment of certain existing debt, according to the person. The debt financing comes as the company faces the April maturity of a $600 million dollar-denominated note and heightened competition in the artificial intelligence business, one of its fastest-growing segments.
A Baidu representative didn’t respond to an email seeking comment earlier in the day.
Baidu’s cloud revenue grew 26% in the December quarter, owing to the generative AI boom. But that wasn’t enough to stem a third straight quarterly revenue drop as competition ramps up for Internet search and AI businesses.
–With assistance from Yuling Yang.
(Updates with bond sales result.)
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