Benzinga | Feb 3, 2021 01:40PM EST

Alibaba Seeks To Raise $5B In US Dollar Debt Offering This Week

Alibaba Group Holding Ltd (NYSE:BABA) is planning to raise $5 billion by selling dollar-denominated bonds this week, Reuters reported Wednesday (Shanghai-time).

What Happened: The book for the offering will open on Thursday and the deal is expected to be priced on the same day, a person familiar with the matter told Reuters.

See also: How To Buy Alibaba Stock

"They monitor the markets very closely and they have elected to go now. It's Alibaba, they will get it done. We have been waiting for this transaction to come for a long time now," the person told Reuters.

The offering is expected to have maturities of up to 40 years and may include a tranche of sustainability notes due in 2041, according to a terms sheet seen by Reuters.

Citigroup Inc (NYSE:C), Credit Suisse Group AG (NYSE:CS), Morgan Stanley (NYSE:MS), JPMorgan Chase & Co (NYSE:JPM), and China International Capital Corporation Limited (OTC:CNICF) are acting as joint bookrunners for the proposed offering.

Why It Matters: On Tuesday, Alibaba released its results for the quarter ended December with EPS at RMB 22.03 ($3.41) beating the RMB 20.87 ($3.23) estimated by analysts.

Investor response to the latest offering would be a litmus test of sentiment towards the Jack Ma-founded company, which has been grappling with a regulatory backlash.

In January, it was reported that the company planned to raise $5 billion, but it could raise up to $8 billion if investor response was favorable.

The funds are expected to be used for general corporate purposes.

Alibaba-backed Ant Group's $37 billion IPO was scuttled by China's President Xi Jinping last year.

Ma has been keeping a low profile since Oct. 24 when he criticized China's regulators ahead of the Ant IPO. The entrepreneur resurfaced last month.

Price Action: Alibaba shares closed 3.85% lower at $254.50 on Tuesday and gained nearly 0.7% in the after-hours session.