ByteDance secures $29.6 billion loan as AI spending accelerates: Bloomberg

Chinese tech giant ByteDance, the owner of TikTok, has secured a $29.6 billion loan, positioning itself as Asia's second-largest dollar-denominated borrowing this year, according to Bloomberg. The Beijing-based company had initially aimed for a $20 billion facility but expanded it after receiving over $30 billion in orders from banks, as reported by Bloomberg.

The loan proceeds will primarily be used for general corporate purposes and has not been signed yet, with banks confirming their allocations. Currently, the only larger dollar-denominated loan in the region this year is SoftBank Group's $40 billion bridge loan, signed in March. This financing comes as ByteDance intensifies its investment in artificial intelligence, potentially increasing its capital spending to $70 billion this year, more than double the previous year's amount.

The loan features a notably low margin of 68 basis points over the Secured Overnight Financing Rate, the lowest among Chinese technology companies and below the 85-basis-point margin on its previous offshore loan, as stated by Bloomberg. ByteDance's three-year loan term can be extended up to five years. Despite a slowdown in Asia's loan market, which Bloomberg noted had its weakest first-half performance in 16 years, strong lender demand supported ByteDance's financing.

Citigroup and JPMorgan are managing the loan. ByteDance last accessed the global loan market in 2024, raising $10.8 billion through a syndicate of approximately 20 lenders.