According to persons familiar with the situation, ByteDance Ltd., the Chinese company that owns TikTok, is approaching banks for a $9.5 billion loan.
If approved, this would be the largest dollar-denominated corporate facility outside of Japan in Asia.
The financing, which is being organised by Citigroup, Goldman Sachs, and JPMorgan, has a three-year duration with the option to extend it for up to five years, according to sources.
The facility’s size exceeds previous predictions, indicating ByteDance’s intention to capitalise on the plentiful liquidity in Asia’s credit market during a period of low deal volume.
ByteDance, launched in 2012 and headquartered in Beijing, has quickly risen to become China’s biggest social media player with its popular app, Douyin.
It also owns TikTok, a popular social media platform in the United States that has strained relations between the two countries.
The company is focussing on extending its business beyond internet advertising to include e-commerce and generative AI.
In China, ByteDance is aggressively investing in the creation of massive language models and ChatGPT-like applications.
TikTok plans to expand its specialised live shopping platform into other European nations after finding success in the United States.
According to the sources, ByteDance’s new loan includes a greenshoe option that allows the size to be increased above $9.5 billion, and it pays an opening interest margin of 85 basis points over the benchmark Secured Overnight Financing Rate.
We earlier reported that ByteDance reportedly heightened rivalry with regional rivals and OpenAI’s Sora by launching a text-to-video generator in China through a new app, Jimeng AI.
The new product created by Faceu Technology is currently listed on the Apple App Store, according to the report.
