Alibaba to raise US$3.2 billion via convertible notes to fund cloud and e-commerce push

Core Viewpoint - Alibaba Group Holding plans to raise US$3.2 billion through the sale of zero-coupon convertible senior notes to fund its cloud and international e-commerce operations [1][3]. Financing Details - The zero-coupon convertible senior notes will mature on September 15, 2032, and will be offered privately to non-US investors [1]. - These notes will not pay interest but can be converted into US-listed shares of Alibaba, with the option for Alibaba to pay in shares, cash, or a combination of both [2]. Conversion and Pricing - The conversion rate is set at 5.1773 American depositary shares (ADSs) for every US$1,000 principal amount, equating to US$193.15 per ADS or HK$188.08 per ordinary share [3]. Allocation of Proceeds - Approximately 80% of the proceeds will be allocated to enhancing cloud infrastructure, including scaling up data centers and upgrading technology [4]. - The remaining 20% will focus on expanding international commerce operations to improve market presence and efficiency [4]. Credit Rating - S&P Global Ratings assigned an A+ rating to the notes, reflecting the low subordination due to Alibaba's significant net cash position [4][5]. - As of June 30, Alibaba's cash and liquid investments were reported at 586 billion yuan (US$82 billion) [5].