Baidu raises US$1b in bond sale to pay for acquisition
Print Edition
China’s largest search engine operator Baidu Inc sold US$1 billion of five-year bonds in the international market yesterday in a bid to replenish capital for future development.
The senior unsecured notes were sold at a yield of 3.29 percent in New York, marking Baidu’s second bond sale in eight months. The company sold notes at a yield of 2.27 percent in November last year.
JP Morgan Securities and Goldman Sachs (Asia) LLC are the joint bookrunners of the offering, the company said in a stock exchange filing.
The proceeds will be used for general corporate purposes, including merger and acquisition activities, it said.
In late July, the company said it is acquiring third party application store operator 91 Wireless Websoft Ltd for US$1.9 billion, making it China’s largest Internet acquisition deal.
Moody’s Investors Service assigned an A3 rating for the Baidu bonds and affirmed the A3 issuer rating for Baidu.
“The proposed notes will further enhance Baidu’s liquidity,” Alan Gao, a Moody’s vice president and senior analyst, said in a report.
“While Baidu has sufficient cash to fund the US$1.9 billion needed for acquiring 91 Wireless, it will be more tax efficient for Baidu to raise offshore funding through the issuance of notes,” the report said.
Baidu had a total cash balance of US$5.5 billion at the end of June 2013, the company revealed in its latest financial release.
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