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Tencent Music Prices $1 Billion Bond Sale as Borrowings Jump to 13 Billion Yuan From Zero

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Tencent Music Prices $1 Billion Bond Sale as Borrowings Jump to 13 Billion Yuan From Zero

Tencent Music Entertainment (HKG:1698) priced a $1 billion US dollar-denominated two-tranche senior unsecured notes offering on Thursday, according to filings with the Hong Kong bourse and the US Securities and Exchange Commission.

The tranches include a $500 million offering of 5.050% notes due in 2031 and $500 million of 5.650% notes due in 2036.

The company expects net proceeds of about $991.9 million from the deal after deducting underwriting costs and offering expenses.

The Tencent Holdings (HKG:0700) subsidiary, dubbed China's largest online music and audio entertainment platform, plans to use the proceeds for general corporate purposes, including refinancing its offshore debts and funding share repurchases, according to its bond sale prospectus.

The plan comes as Tencent Music booked 13.1 billion yuan in borrowings as of the end of June, versus zero at the end of 2025. Total debt stood at 16.5 billion yuan as of June-end, according to its bond prospectus.

The company said its bank borrowings grew following its purchase of Chinese online audio platform Ximalaya. That deal was completed in May.

J.P. Morgan Securities, Goldman Sachs (Asia) and HSBC serve as joint bookrunners of the bond sale, with UBS, Bank of China and MUFG Securities Asia serving as joint lead managers.

S&P Global assigned an A long-term issue rating to the bonds, citing the company's net cash position. Its capital structure comprised 3.4 billion yuan of senior unsecured debt at the parent level and 13.1 billion yuan of bank borrowings at the level of its subsidiaries as of the end of June, S&P said.

Moody's assigned an A2 senior unsecured rating to the bonds, saying the offering "will further strengthen Tencent Music's already robust liquidity, enhance its financial flexibility, and support future growth initiatives and investment requirements."

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Tencent Music Prices $1 Billion Bond Sale as Borrowings Jump to 13 Billion Yuan From Zero | FINWIRES