Chinese technology firm Baidu plans to issue yuan-denominated bonds in offshore markets to repay existing debt and fund general corporate purposes, according to an exchange filing on Wednesday.
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The exact size, interest rate and maturity of the offering would be determined later based on market conditions, the Beijing-based company said.
It would be Baidu’s first bond offering since 2021 and comes ahead of a US$600 million debt maturing on April 7, according to Bloomberg data.
Moody’s on Wednesday assigned an A3 senior unsecured rating to the proposed notes, which it said reflected Baidu’s strong position in China’s artificial intelligence (AI) and online advertising sectors, plus its steady free cash flow. The grade also considered its disciplined acquisitions and resilience, as well as the challenges posed by intense market competition and high investment needs for AI expansion, the company added.
“The proposed issuance will extend Baidu’s debt maturity profile, provide financial flexibility and expand its capacity to address its funding needs over the medium term,” said Shawn Xiong, a Moody’s vice-president and senior analyst.
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“We expect the company will continue to maintain its prudent financial discipline and a solid credit profile, which will provide buffers against competition and its continued investment in AI.”
Baidu last month reported a 2 per cent decline in revenue for the fourth quarter of 2024 and a 1 per cent drop for the year, as China’s sluggish economic growth weighed on advertising spending. While its AI business remains a bright spot, competition has intensified.