By Yantoultra Ngui and Ankur Banerjee
HONG KONG, Oct 13 (Reuters) - Tencent Holdings has received investor demand worth more than three times the Chinese tech giant's plan to raise at least $4.5 billion via US dollar and offshore Chinese yuan debt offerings, even as AI spending jitters hit the global markets.
Tencent plans to use the proceeds for general corporate purposes, according to the deal term sheet, and the latest borrowing comes as the company increases investment in AI infrastructure and products.
The latest debt sale comes amid technology firms globally raising billions of dollars to finance AI investments, although investors have become more selective about companies funding costly AI infrastructure amid elevated borrowing costs.
Shares in AI suppliers came under heavy selling pressure on Tuesday on growing concerns about competition risks in the sector and rising interest rates weighing on AI-related borrowing and a spending spree.
Despite those concerns, investor demand for Tencent's 10-year and 20-year US dollar notes topped $4 billion, including $921 million in interest from the joint lead managers, according to an updated term sheet issued on Tuesday.
Order books for the 10-year and 30-year offshore yuan, or dim sum, bonds exceeded 77 billion yuan ($11.5 billion), the sheet showed.
The total demand worth $15.5 billion is significantly higher than at least $4.5 billion that a person with direct knowledge of the deal told Reuters on Monday the company was looking to raise.
The company last tapped the bond market in June, raising about $4.66 billion through dollar- and yuan-denominated notes.
Its return to the bond market so quickly suggests capital remains available for AI, particularly for companies with strong cash flows, balance sheets and credible monetisation plans, said Allspring Global Investments portfolio manager Gary Tan.
"We are seeing a more definitive shift in sentiment around the pace of AI spending, as investors increasingly view financing availability and the cost of capital as potential bottlenecks to a further acceleration in AI investment," he said.
Tencent has not responded to a Reuters request seeking comment on its debt issuance. The deal term sheet did not specify how much the company is looking to raise via the sale of US dollar and offshore yuan notes.
CAPITAL EXPENDITURE DOUBLES
Shares in Tencent were down 0.5% on Tuesday, underperforming the benchmark Hang Seng Index that climbed 0.1%. The Hang Seng Tech Index fell nearly 1%. Tencent's shares have fallen about 30% so far this year.
Tencent set initial guidance for the 10-year dollar notes at about 115 basis points over comparable US Treasury bonds. The 20-year notes were set at about 140 basis points over Treasuries, according to the term sheet.
It set initial yield guidance at around 2.90% for the 10-year offshore yuan notes and 3.50% for the 30-year notes, the sheets showed. The final coupons for all the bonds are expected to be determined later Tuesday, according to the sheets.
Tencent's capital expenditure more than doubled to 96.3 billion yuan in the first half of 2026 from 45.9 billion yuan a year earlier, according to its offering documents. The spending included computing equipment, software and data centres.
The bonds are expected to be rated A1 by Moody's and A+ by S&P. Tencent is rated A1 by Moody's, A+ by S&P and A by Fitch, according to the term sheet.
JPMorgan, Goldman Sachs, HSBC and Morgan Stanley are joint global coordinators for Tencent's dollar bond offering, the sheet showed.
ICBC (Asia), Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank, CITIC Securities, HSBC and JPMorgan are coordinating the offshore yuan sale, according to the sheet.
($1 = 6.6923 Chinese yuan renminbi)
(Reporting by Yantoultra Ngui in Hong Kong and Ankur Banerjee in Singapore; Editing by Sumeet Chatterjee and Thomas Derpinghaus)
