TikTok parent ByteDance eyes $9.5 bn in record Asia dollar corporate loan

By Chien Mi Wong

ByteDance Ltd., the Chinese owner of TikTok, is tapping banks for a $9.5 billion loan that would be the biggest dollar-denominated corporate facility in Asia ex-Japan, according to people familiar with the matter.
 

Citigroup, Goldman Sachs and JPMorgan are the coordinators of the latest financing, which carries a tenor of three years and can be extended to a maturity of up to five years, said the people, who asked not to be identified discussing a private matter.

ByteDance’s facility is larger than the earlier-anticipated size — an indication that the borrower is eager to take advantage of Asia’s loan market, which is flush with liquidity amid dismal deal flow.

Dollar loan volume, excluding bilateral facilities, tumbled 44 per cent to about $45.5 billion in the first half of the year across Asia excluding Japan. That’s the lowest level since 2010, according to data compiled by Bloomberg.

ByteDance didn’t respond to a request for comment. 

Proceeds of the deal will be partly used to refinance an existing $5 billion dual-tranche facility the group had raised in 2021, according to Bloomberg-compiled data. They will also be used for working capital purposes, the people said. 

ByteDance’s new loan carries a greenshoe option that allows the size to expand beyond $9.5 billion, the people said, adding that it pays an opening interest margin of 85 basis points over the benchmark Secured Overnight Financing Rate.

Founded in 2012, Beijing-based ByteDance has quickly become one of the leading social media companies in China with the widely used mobile-video application Douyin. It’s also the parent company of TikTok, the social-media app popular in the US, which has become a flashpoint in relations between the two countries in recent years.

ByteDance is looking to expand beyond its core business of online advertising into areas like e-commerce and generative AI. At home, it’s among a slew of local big-tech firms that has sunk billions of dollars into research and development of large language models and ChatGPT-style apps. Abroad, TikTok is planning to roll out its niche live shopping platform in more European markets, after initial success in the US.