Tencent completes bond issuance of $1.8 billion and 26 billion yuan
Key Facts
Tencent completed the issuance of $1.8 billion and 26 billion yuan in bonds under its global medium-term note programme, according to the company's completion announcement. It said the issuance was completed on 21 October 2026, New York time, concluding an offering that combines dollar and yuan funding across different maturities. In its pricing announcement, the company estimated net proceeds after underwriting fees, discounts and commissions at about $1.79 billion and 25.89 billion yuan. It specified the intended use of the funds, saying it planned to allocate the net proceeds to "general corporate purposes". In a filing publishing the pricing supplements, Tencent announced that the bonds' listing and permission to trade on the Hong Kong Stock Exchange became effective on 22 October 2026.
The dollar-denominated bonds include a $1.30 billion tranche, according to the term sheet in the pricing announcement. This tranche carries an annual interest rate of 6.10% and matures on 21 October 2036. The company set its offering price at 99.859% of face value, pricing the bonds below par. The other dollar tranche amounts to $500 million, according to the listing notice published by Tencent. The senior notes in this tranche carry an annual interest rate of 6.75% and mature in 2046. The longer-dated dollar tranche therefore carries a higher annual interest rate than the larger tranche, with different principal repayment dates.
On the yuan funding side, the larger tranche amounts to 20.0 billion yuan, according to the company's pricing announcement. Tencent set the annual interest rate on this tranche at 2.40%, with the bonds maturing on 21 October 2036. The company offered these bonds at 100.0% of face value, unlike the offering price of the dollar tranche maturing on the same date. The longer-dated yuan tranche amounts to 6.0 billion yuan and carries an annual interest rate of 3.00%. This tranche matures on 21 October 2056, making it the longest-dated tranche of the issuance, while its offering price was also set at 100.0% of face value. The offering terms show different interest rates for the yuan tranches according to their maturities, with both issued at par.
The issuance comes as Tencent's capital expenditure rose to 96.3 billion yuan in the first half of 2026, according to financial information the company included in its proposed issuance announcement. That compares with capital expenditure of 45.9 billion yuan in the first half of 2025, putting spending in the latest period at more than twice its level in the corresponding period. The company attributed the increase in its first-half cost of revenue to "higher depreciation of AI-related equipment and associated operating costs". In the bond market, Reuters reported that the offering attracted combined investor orders exceeding $23 billion at pricing on 13 October 2026. In equities, the agency said Tencent shares closed down 0.1% on Tuesday, the day the bonds were priced.
The offering marks Tencent's return to bond issuance during the year, following an earlier pricing announced on 10 June 2026. The June issuance comprised $2.45 billion and 15 billion yuan in bonds, according to the company's statement on that offering. Compared with the June issuance, the October issuance was smaller in dollars and larger in yuan, with continued use of the global medium-term note programme. The programme has a ceiling of $30 billion, according to the company's filing publishing the pricing supplements. In its next corporate milestone, Tencent's board will meet on 18 November 2026 to approve unaudited third-quarter results, according to the board meeting announcement. The meeting's agenda also includes consideration of a dividend.