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Alibaba to Raise $3.2 Billion via Convertible Bond for Cloud and Global Expansion

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Alibaba announced Thursday it will raise $3.2 billion through the sale of a zero-coupon convertible bond, the largest such deal this year according to Dealogic, surpassing DoorDash’s $2.75 billion issue in May. The move underscores the Chinese tech giant’s push to scale its cloud computing and international e-commerce operations.

Use of Proceeds

  • ~80% will go toward data center expansion, tech upgrades, and cloud service improvements.

  • The remainder will be invested in boosting e-commerce efficiency and market presence.

Bond Terms

  • Convertible into Alibaba’s U.S.-listed shares.

  • Conversion premium: 27.5%–32.5% above U.S. stock price.

  • Maturity date: September 15, 2032.

Market Reaction

  • Hong Kong shares rose 2.3% to HK$146.1, reversing earlier losses and moving in line with the Hang Seng Index.

  • U.S.-listed shares fell 2.2% on Wednesday.

  • Year-to-date: Hong Kong stock up 71.6%, U.S. stock up 71.1%.

Cloud and AI Strategy

Alibaba is one of China’s largest AI investors, pledging 380 billion yuan ($53.4 billion) over three years. CEO Eddie Wu recently highlighted AI as central to cloud revenue growth, saying: “We are seeing an increasingly clear path for AI to drive Alibaba’s robust growth.”

The company has raised capital aggressively in recent years:

  • $1.5 billion via exchangeable bond in July.

  • $5 billion convertible bond in May 2023.

Broader Market Context

Convertible bonds are seeing strong momentum in Asia-Pacific. Issuance this year totals $27.8 billion, just shy of last year’s $28.7 billion, marking the strongest run in three years.

Alibaba’s fundraising aligns with a surge in Hong Kong’s equity capital markets, where investors favor convertible bonds for their equity upside potential alongside principal repayment guarantees if conversion is not exercised.

Alibaba to Raise $1.53 Billion via Exchangeable Bonds for Cloud and Global Commerce Expansion

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Alibaba Group has announced plans to raise approximately HK$12 billion ($1.53 billion) through the issuance of exchangeable bonds, as part of its strategic push into cloud computing and international commerce.

The bonds, which can later be exchanged for shares in Alibaba Health Technology, will carry zero interest, making them an attractive vehicle for investors seeking exposure to Alibaba’s healthcare arm while supporting the group’s broader growth strategy. Alibaba currently owns a 64% stake in Alibaba Health.

This financing initiative follows the company’s $5 billion dual-currency bond sale in November 2024, the largest of its kind in the Asia-Pacific region that year. It also signals growing momentum among Chinese tech companies using exchangeable debt to unlock capital—similar to Baidu’s $2 billion note offering tied to shares of Trip.com earlier in 2025.

The proceeds from Alibaba’s new bond sale are earmarked for:

  • Cloud infrastructure investment, including AI model development centered on Alibaba’s Qwen AI,

  • Expansion of global commerce operations, with infrastructure rollouts already underway in Thailand, Mexico, and South Korea.

The offering comes amid improving sentiment in the Asian credit markets, buoyed by recent fiscal and monetary stimulus from Beijing. Analysts say the favorable debt environment is encouraging large corporates like Alibaba and Miniso to return to capital markets with convertible or exchangeable instruments.

Alibaba clarified that Alibaba Health will remain a core, consolidated subsidiary, both during and after the bond exchange process. This move ensures continuity of operations while unlocking capital for strategic reinvestment.