Chinese technology companies have come under tighter regulations from its central government, and owing to the restrictions imposed, China’s Xiaomi Corp. is now marketing a dollar bond deal to global investors.
According to reports, the smartphone manufacturer is looking to raise about $1 billion from the debt sale. It will also include a rare green bond tranche from the nation’s tech firms. According to sources, China’s National Development and Reform Commission has provided the borrower with a bond sale quota of $1.2 billion. However, Xiaomi is yet to decide whether or not to use the entire quota.
This move from the tech giant is reported to come in response to Beijing’s latest move to rein in some of the nation’s biggest tech firms. According to reports, the Initial price guidance for Xiaomi’s pending offering was set at 200 basis points above comparable U.S. Treasuries for a 10-year dollar bond. As well as at 260 basis points for a 30-year green bond. The sources come from people who are familiar with this matter, however, they want to remain unnamed.
Speaking of Xiaomi, the company had quite a good business this past couple of years. it’s a dominant smartphone brand of the world’s biggest smartphone market, India, and has raised nearly $5 billion in 2020 from the sale of various securities. Its core smartphone business has also reported strong growth this year as well.
However, the company is now looking beyond consumer electronics, and in March unveiled a potential $10 billion foray into making electric cars. The company also announced that eligible projects for its green bond proceeds include clean transportation and renewable energy. And the company already has made more than 40 types of energy-saving products.
