Chinese tech giant Alibaba Group is set to raise approximately HK$12 billion ($1.53 billion) through the issuance of exchangeable bonds, with proceeds earmarked for scaling its cloud infrastructure and global commerce operations.
The exchangeable bonds will be linked to shares of Alibaba Health Technology, in which Alibaba holds a 64% stake, according to an exchange filing. These zero-coupon bonds — meaning they will not pay interest — offer investors the option to convert into Alibaba Health shares at a later date.
This proposed debt offering follows Alibaba’s $5 billion dual-currency bond issue in November 2024, the largest in the Asia-Pacific region that year, underlining the company’s deepening focus on strategic investments across emerging tech and international markets.
Alibaba, widely recognized for its dominance in China’s e-commerce sector, has been ramping up its AI initiatives, particularly through standalone products built on its proprietary Qwen AI models. The group is also expanding its cloud presence globally, with recent infrastructure investments announced in Thailand, Mexico, and South Korea.
This latest financing move comes amid renewed investor interest in Asian credit markets, spurred by supportive fiscal and monetary policies from Chinese authorities. The use of exchangeable bonds has become increasingly popular among Chinese tech firms looking to monetize holdings — Baidu’s $2 billion bond deal tied to Trip.com shares in March being a notable example.
Despite offering share exchange options, Alibaba affirmed its commitment to retaining Alibaba Health as a consolidated subsidiary and its flagship healthcare platform, even after any potential conversion of the bonds.
The trend reflects a broader shift among Chinese companies towards Hong Kong-listed instruments for capital raising — seen earlier this year when Miniso completed a $550 million convertible bond using its Hong Kong shares, rather than U.S.-traded ADRs.
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