Chinese search engine giant Baidu will issue a 4.4 billion yuan (US$618 million) dim sum bond aimed at securing lower financing costs and operational flexibility amid an aggressive artificial intelligence expansion.
The bond carries an annual coupon of 1.9 per cent and will mature in 2029. Baidu priced the bond on Tuesday, with the offering expected to close on or about September 15, 2029.
It is the second dim sum bond – denominated in yuan and issued outside mainland China – that the company has sold and follows a previous issuance in March which raised 10 billion yuan through two tranches: 7.5 billion in 5-year bonds and 2.5 billion yuan in 10-year bonds.
Baidu is among a growing group of issuers taking advantage of relatively low Chinese interest rates and increased demand from investors seeking alternatives to US dollar assets.
As of late August, issuers sold a record US$43.8 billion in dim sum bonds this year, according to Bloomberg, with many expecting Chinese offshore debt to reach further records by year-end.
The issuance comes as Baidu last month reported weak second quarter earnings.
Its total revenue dropped 2 per cent to 26 billion yuan and net profit fell 34 per cent to 4.8 billion yuan, compared with a year earlier.
