Shares of Meituan, China's leading food delivery and e-commerce platform, soared 5.36% on Tuesday, fueled by the company's announcement of plans to raise $2.5 billion through a dollar-denominated bond offering.
The company is issuing two tranches of bonds - a $1.2 billion 3.5-year bond with a 4.5% interest rate and a $1.3 billion 5-year bond with a 4.625% interest rate. According to Meituan, the proceeds from this bond issuance will be used to refinance its existing offshore debt and fund general corporate purposes.
This move marks the first offshore debt issuance by a Chinese technology company in 2024, signaling Meituan's efforts to bolster its financial position and secure capital to fund its ambitious growth strategies amid intense competition in China's burgeoning online services market. Analysts have viewed this bond issuance positively, citing Meituan's strong profitability and cash flow generation ability, which should allow it to comfortably service the debt.
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