WeChat-Owner Tencent Seeks $6 Billion Loan After Deals

Tencent Holdings Ltd., the creator of the messaging platform WeChat, is in talks with banks for a $6 billion loan, according to people familiar with the matter.

FILE PHOTO: The sign of the WeChat app is seen reflected on a mobile phone in this illustration picture taken September 19, 2020. REUTERS/Florence Lo/Illustration (REUTERS)

Tencent Holdings Ltd., the creator of the messaging platform WeChat, is in talks with banks for a $6 billion loan, according to people familiar with the matter.

That would be the biggest dollar loan syndicated in Asia for a Chinese firm since 2019, according to data compiled by Bloomberg. It would also mark a flurry of potential debt financings by tech giants after people familiar said earlier this month that rival Alibaba Group Holding Ltd. was looking to sell up to $8 billion of bonds.

Under the terms being discussed, Tencent's five-year deal would pay an interest margin of 80 basis points over Libor and offer all-in pricing of 85 basis points, the people said, asking not to be identified as they aren't authorized to speak publicly. The proceeds are for general corporate purposes, they added. For more details click here.

Tencent has in recent years spent billions of dollars buying stakes in promising startups, extending its reach in areas from social media to grocery delivery. It agreed last month to buy an additional 10% of Universal Music Group. Other people familiar with the matter also said Friday that Tencent has gotten a EU1.3 billion ($1.6 billion) loan for that deal.

In addition, the company is locked in a fierce battle for users and advertisers against nemesis ByteDance Ltd., which runs TikTok. The WeChat operator is also pushing its gaming portfolios internationally, with hits like Call of Duty Mobile.

A representative with Tencent declined to comment.

Written by Jacqueline Poh and Apple Lam.