China-based e-commerce behemoth Alibaba Group Holdings Ltd. (NYSE: BABA) filed a prospectus on Tuesday with the U.S. Securities and Exchange Commission (SEC) for an underwritten registered public offering of dollar-denominated senior unsecured notes. The filing does not specify the amount of the offering but news reports indicate that the total value is expected to fall in a range of $5 to $7 billion.
The company issued $8 billion in debt just months after its 2014 initial public offering. The first debt offering included 30-year notes and the new offer is expected to include a note with a 40-year maturity.
The company said in its SEC filing that it expects to use the proceeds for general corporate purposes, including working capital needs, repayment of offshore debt and potential acquisitions of or investments in complementary businesses.
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A report at Reuters states that the offering will include five tranches of 5.5-, 10-, 20-, 30-, and 40-year maturity bonds whose price guidance has been indicated at around 100, 125 to 130, 140, 160, and 180 basis points, respectively, over the prevailing U.S. Treasury bond rate.
According to MarketWatch, Alibaba’s most actively traded bond is a 3.600% note maturing in 2024. It traded at 103.418 cents on the dollar for a yield of 3.036%, some 67 basis points above a 10-year Treasury note.
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Earlier this month, Alibaba reported record sales of more than $25 billion for its Singles Day shopping holiday.
The company’s stock traded down more than 4% in the mid-afternoon Wednesday at $178.83 in a 52-week range of $86.01 to $191.75. The 12-month consensus price target for the stock is $208.42.
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