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Investing.com -- S&P Global Ratings has assigned an ’A+’ issue rating to Alibaba (NYSE:BABA) Group Holding Ltd.’s proposed Hong Kong dollar-denominated senior unsecured exchangeable notes.
The rating agency announced Thursday that the issue rating is equalized with Alibaba’s issuer credit rating of ’A+/Stable/--’, reflecting the notes’ low subordination risk due to the company’s significant net cash position.
As of March 31, 2025, Alibaba’s debt capital structure included Chinese renminbi (RMB) 72.5 billion in bank borrowings and RMB158 billion in senior unsecured notes, which includes convertible notes. The e-commerce giant reported a cash balance of RMB597 billion, which includes short-term investments and other treasury investments.
S&P Global Ratings expects Alibaba to maintain its substantial net cash position even as the company increases investments in cloud and AI infrastructure. The rating agency noted that solid cash flow from Alibaba’s core e-commerce businesses, potential proceeds from the sale of non-core investments, and disciplined share buybacks will support this spending.
Alibaba plans to use the proceeds from the proposed notes for general corporate purposes, including investments to support the development of its cloud infrastructure and international commerce businesses.
The final issue rating remains subject to S&P’s review of the final terms and conditions of the notes.
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