It’s Official: Alibaba Secures $3B Loan

Alibaba has officially signed a $3 billion loan deal that spans a five-year period in order to help the eCommerce and Internet giant grow as it continues on its global acquisition strategy.

The firm revealed this week in a U.S. SEC filing that it signed a loan deal with eight leading banks. It also stated that the amount could increase as needed.

“The loan, which is subject to upsize through oversubscriptions in syndication, has a five-year bullet maturity and is priced at 110 basis points over LIBOR,” the company said in the filing, referring to the traditional interest rate that banks often use for loans.

Alibaba provided little detail on the loan other than to say it would be used for “general corporate purposes.” Sources indicated that Alibaba targeted eight banks for a loan between $3 billion and $4 billion.

The $4 billion figure was reported late last month by multiple media outlets but not formally confirmed until this week.

Alibaba’s most recent publicized investment was its 5.6 percent stake in Groupon — a company that recently announced the sale of its billionth deal. Speculation in the financial media has centered on whether Groupon may be a strategic investment or whether Alibaba may, in fact, be looking to take the company, lock, stock and barrel, through complete ownership.

Another scenario for the two companies would involve Alibaba boosting its stake, with a conversation opening up between the companies leading up to a joint venture. A joint venture would give Alibaba access to Groupon’s insight into building a discount buying platform.

Alibaba also made a major $1 billion investment in Koubei, a food-ordering app, last year. This investment gave Alibaba a bigger presence in services that bring together consumers and restaurants who embrace the concept of on-demand apps. Not long after, Alibaba invested roughly $4.5 billion into Suning Commerce, an electronics retailer, in order to invest more in the logistics side of retail.