Chinese tech giant Baidu taps U.S. dollar sustainability bond

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HONG KONG, Aug 18 - Chinese internet giant Baidu Inc. is tapping the debt markets with a two-tranche, U.S. dollar sustainability bond in a deal that could test global investor appetite for China tech assets as Beijing cranks up regulatory scrutiny.

The search company launched a 5.5 year and 10 year US dollar stable currency notes transaction on Wednesday. The company didn't immediately say how much it aimed to raise via the issuance.

Baidu has indicated to investors that the 5.5 year tranche will be priced around U.S. Treasuries plus 150 basis points, while the 10 year bond would be around U.S. Treasuries plus 115 basis points, according to a term sheet reviewed by Reuters.

It said it intended to use the proceeds of the bonds to pay down current debt and fund environmental, social and corporate governance related projects in the firm.

The firm mandated Bank of America, Goldman Sachs and JP Morgan to lead the transaction.

In its prospectus for the deal lodged with the United States Securities and Exchange Commission Baidu acknowledged the impact of China's regulatory crackdown on the tech sector is not yet fully understood.

In July, China announced companies with more than one million customers would have to be reviewed by the Cyberspace Administration of China before carrying out listings overseas https: www.reuters.com world china clampdown on after-market listings that had pre Ipo review firms - 2021 07 - 10.

The draft measures remain unclear on whether the relevant requirements will be applicable to companies that have been listed in the United States and intend to conduct further equity or debt offerings, such as us. On the prospectus, Baidu said we cannot predict the impact of draft measures.