Alibaba Plans $3.2B Convertible Bond to Boost Cloud and AI Growth
Plans to raise $3.2 billion through a zero-coupon convertible bond aim to fund international growth and strengthen cloud computing. Dealogic data indicates it is the largest of its kind this year.
Nearly 80% of proceeds are allocated to expanding data centers, upgrading technology, and improving cloud services. The remainder is for boosting e-commerce efficiency and market presence. The bond includes a 27.5% to 32.5% conversion premium above U.S.-listed shares and matures on September 15, 2032.
Hong Kong-listed shares fell 2.6%, while New York-listed stock dropped 2.2%. Year-to-date gains exceed 70% in both markets.
AI and Cloud Investments
A total of 380 billion yuan ($53.37 billion) is allocated over three years for artificial intelligence. AI is central to cloud revenue growth.
Previous fundraising included a $1.5 billion exchangeable bond in July and a $5 billion convertible bond in May of last year.
Convertible Bonds in Asia-Pacific
Convertible bonds provide equity upside with principal repayment security. In 2025, $27.8 billion worth have been issued in the Asia-Pacific region, slightly below last year’s $28.7 billion.
China Pacific Insurance announced a zero-coupon convertible bond to raise HK$15.55 billion ($2 billion). Interest in these instruments remains high, especially in Hong Kong’s equity capital markets.
