Chinese tech giant Baidu raises 1 billion despite China tech sector woes

HONG KONG Reuters Chinese internet giant Baidu Inc has raised 1 billion in a two-tranche US dollar sustainability bond its first environment social and governance ESG transactionA 55-year tranche bond raised 300 million and the 10-year tranche secured 700 million a company statement saidThe shorter-dated bond was priced at US Treasuries plus 83 basis points while the longer-dated issuance was at US Treasuries plus 113 basis pointsThe final price was significantly cheaper for Baidu than when first flagged to investors on WednesdayInitial price guidance given to investors was US Treasuries plus 115 basis points for the 55 year bond while the 10-year was US Treasuries plus 150 basis points according to a term sheet reviewed by ReutersBaidu said it intended to use the proceeds to pay down debt and fund ESG-related projects within the firmChinese companies have raised 1212 billion in US dollar debt funding so far in 2021 according to Dealogic data slightly below the 1266 billion raised during the same period last yearIn its prospectus for the deal lodged with the US Securities and Exchange Commission SEC Baidu acknowledged the impact of Chinas regulatory crackdown on the tech sector is not yet fully knownIn July China said companies with over one million customers would have to be reviewed by the Cyberspace Administration of China CAC before carrying out listings overseasThe draft measures remain unclear on whether the relevant requirements will be applicable to companies that have been listed in the United States and intend to conduct further equity or debt offerings such as us We cannot predict the impact of the draft measures Baidu said in the prospectusOn Tuesday Chinese regulators published new rules aimed at the China tech sector to tackle anti-competitive behaviour and companies handling of dataReporting by Scott Murdoch in Hong Kong Editing by Edwina Gibbs