HONG KONG – Tencent Holdings has received investor demand worth nearly four times the Chinese tech giant’s plan to raise at least US$4.5 billion (S$5.7 billion) via US dollar and offshore yuan debt offerings even as AI spending jitters hit global markets.
Tencent plans to use the proceeds for general corporate purposes, according to the deal term sheet, and the latest borrowing comes as the company increases investment in AI infrastructure and products.
The sale comes as technology firms globally raise billions of dollars to finance AI investments, although investors have become more selective about companies funding costly AI infrastructure amid elevated borrowing costs.
Shares in AI suppliers faced heavy selling pressure on Oct 13 as concerns grow about competition risks in the sector and rising interest rates weighing on AI-related borrowing and a spending spree.
Despite those concerns, investor demand for Tencent’s 10-year and 20-year US dollar notes topped US$5.6 billion, including US$1.4 billion in interest from the joint lead managers, according to an updated term sheet issued on Oct 13.
Order books for the 10-year and 30-year offshore yuan, or dim sum, bonds exceeded 77 billion yuan (S$14.7 billion), the sheet showed.
The total demand worth US$17.1 billion is significantly higher than the figure of at least US$4.5 billion that a person with direct knowledge of the deal had told Reuters on Oct 12 the company was looking to raise.
The company last tapped the bond market in June, raising about US$4.66 billion through dollar- and yuan-denominated notes.
Its return to the bond market so quickly suggests capital remains available for AI, particularly for companies with strong cash flows, balance sheets and credible monetisation plans, said Allspring Global Investments portfolio manager Gary Tan.
“We are seeing a more definitive shift in sentiment around the pace of AI spending, as investors increasingly view financing availability and the cost of capital as potential bottlenecks to a further acceleration in AI investment.”
Tencent has not responded to a Reuters request for comment on its debt issuance. The deal term sheet did not say how much it was looking to raise via the sale of US dollar and offshore yuan notes.
Capital expenditure doubles
Shares in Tencent were down 0.1% on Oct 13, underperforming a rise of 0.3% in the benchmark Hang Seng Index. The Hang Seng Tech Index fell nearly 0.8%. Tencent’s shares have fallen about 29% so far in 2026.
Tencent set initial guidance for the 10-year dollar notes at about 115 basis points over comparable US Treasury bonds. The 20-year notes were set at about 140 basis points over Treasuries, according to the term sheet.
It set initial yield guidance at around 2.90% for the 10-year offshore yuan notes and 3.50% for the 30-year notes, the sheets showed. The final coupons for all the bonds are expected to be determined later on Oct 13, according to the sheets.
Tencent’s capital expenditure more than doubled to 96.3 billion yuan in the first half of 2026 from 45.9 billion yuan a year earlier, according to its offering documents. The spending included computing equipment, software and data centres.
The bonds are expected to be rated A1 by Moody’s and A+ by S&P. Tencent is rated A1 by Moody’s, A+ by S&P and A by Fitch, according to the term sheet.
JPMorgan, Goldman Sachs, HSBC and Morgan Stanley are joint global coordinators for Tencent’s dollar bond offering, the sheet showed.
ICBC (Asia), Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank, CITIC Securities, HSBC and JPMorgan are coordinating the offshore yuan sale, according to the sheet. REUTERS
