Chinese super company, Alibaba issued $8 billion dollars in its offering on the U.S. bond market today. This marks the largest offering in the U.S. bond market by any Asian company. Alibaba surpassed the Bank of China, which not long ago had a $6.5 billion dollar offering on the bond market.
Alibaba bonds were given an A1 rating, further showing American faith in the newly issued bonds. Alibaba bonds are the best-rated non-state owned Chinese bonds ever. Alibaba’s ratings are higher than American giant companies Ebay and Amazon, and on the same level as Oracle and Intel, though not quite as high as companies such as Microsoft. The reason for this is Alibaba’s rather short life as a public entity. Alibaba’s issuance is the largest bond offering of any new company.
Alibaba is truly an astounding and massive company. Two months ago, it had the largest IPO ever garnering $21.8 billion on the New York Stock Exchange. The stock has increased by 64 percent from the day of the IPO. After today’s market close, Alibaba currently has a market capitalization at just about $265 billion dollars, a staggering value.
Alibaba has gotten close to $50 billion dollars in bond orders and is considering increasing its initial bond offering to meet demand. Many claim that this ridiculous demand is due to the lack of new bonds in the U.S. Many American companies have been issuing bonds in Europe due to lower rates. Chinese companies on the other hand have issued $28 billion dollars on the U.S. bond market this year.