By Yantoultra Ngui
HONG KONG, Oct 13 (Reuters) - Tencent Holdings is selling US dollar and offshore Chinese yuan, or dim sum, bonds in a deal that could raise at least $4.5 billion as the Chinese technology giant seeks funding amid higher spending on artificial intelligence.
The sale comprises 10-year and 20-year US dollar notes and 10-year and 30-year offshore yuan notes, according to term sheets seen by Reuters on Tuesday, which did not specify the size of any tranche.
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 sheets.
Order books for the two-tranche dollar offering topped $2 billion, including $525 million in interest from the joint lead managers, according to an updated message from the sheets.
The company 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.
Books for the 10-year and 30-year offshore yuan notes exceeded 35 billion yuan ($5.2 billion), including 20.25 billion yuan in orders from the joint lead managers and 60 million yuan in additional proprietary interest, according to an updated message from the sheets.
On Monday, Reuters reported that Tencent was planning a dollar and offshore yuan bond sale that could raise at least $4.5 billion.
Tencent did not immediately respond to a request seeking comment on Tuesday.
Tencent shares fell 1.3% on Tuesday, in line with the benchmark Hang Seng Index which was 1.1% lower, while outperforming the Hang Seng Tech Index, which dropped 2.7%. Tencent's shares have fallen about 30% so far this year.
CAPEX DOUBLES
The planned borrowing comes as Tencent increases investment in AI infrastructure and products.
Its 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.
Technology companies have raised billions of dollars to finance AI investment, although investors have become more selective about companies funding costly AI infrastructure amid elevated borrowing costs.
Tencent last tapped the bond market in June, raising about $4.66 billion through dollar- and yuan-denominated notes.
Tencent plans to use the proceeds for general corporate purposes, according to the sheets.
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 sheets.
JPMorgan, Goldman Sachs, HSBC and Morgan Stanley are joint global coordinators for the dollar sale, the sheets 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; Editing by Christian Schmollinger, Tom Hogue and Thomas Derpinghaus)
