Huawei reportedly raised funding of $2.7 billion in Chinese debt sale

Huawei Investment & Holding Corporation (also known as the parent firm of Huawei Technologies) has reportedly raised a funding of $2.7 billion in the Chinese debt sale. It is company’s largest funding attempt in China for this year.

According to Bloomberg, Huawei is increasing the funding amounts of debt in the Chinese market by $2.7 billion (20 billion yuan). It is trying to use low borrowing costs at times when the US authorities are targeting local financing in China.

The Chinese company has recently issued a 246-day note at a coupon rate of 1.57%, hinting at a record low. Huawei said that the proceeds from the debt sale will support operating costs for its headquarters and subsidiaries.

Inputs add that Huawei has raised 20 billion yuan in funds via an ultra-short-term commercial paper (SCP) issuance since late March. An Ultra SCP has a tenor of around 270 days. Zerlina Zeng – Head of Asian strategy at Creditsights Singapore said:

“Banks are keen to underwrite and take up these new issues. Government focuses on supporting techs and private government focuses on techs and private firms, funding efforts.”

Further details say that the latest funding attempt is quite in line with the Chinese government’s efforts to increase financial banking for technology innovation.

Last month, the governor of the People’s Bank of China, Pan Gongsheng had announced a “tech board” in the bond market to facilitate mid-to-long-term debut sales by growth-stage tech companies to fund research and development.

Simply put, Huawei’s fund debt issuance is part of the Chinese financial support strategy for strategic tech firms dealing with the foreign trade export challenges.

Apart from Huawei, ZTE also raised 28.5 billion yuan this year via 23 bond sales.

Huawei reportedly raised funding of $2.7 billion in Chinese debt sale (Image Credits: Weibo)

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