ByteDance Ltd., the developer of TikTok, has secured a $29.6 billion loan from over two dozen lenders, including Industrial and Commercial Bank of China Ltd. and HSBC Holdings Plc, marking one of Asia’s largest dollar-denominated transactions this year. The three-year borrowing, which has the potential to be extended to a maximum of five years, garnered interest from 28 banks, with some making commitments through different branches or subsidiaries, as reported by a source. The signing occurred last week, as per an individual. Chinese banks have positioned themselves as the predominant group of lenders, with 15 institutions pledging a total of $18.9 billion, which accounts for 64% of the increased loan amount.
ICBC has committed to providing $3 billion, with Bank of China Ltd. contributing $2.5 billion and China Construction Bank offering $1.5 billion. HSBC ranked among the leading foreign banks within the lender consortium, contributing a substantial commitment of $1.5 billion. The deal indicates that backing for the Chinese tech giant, which is at the leading edge of artificial intelligence technology development, remains robust, even in the context of a constrained interest margin. The loan size represented a significant increase from the $20 billion ByteDance initially sought.
The financing was finalised mere days prior to a statement from the heads of the world’s leading artificial intelligence platforms, including OpenAI Chief Executive Officer Sam Altman, Anthropic PBC CEO Dario Amodei, and xAI Corp. co-founder Elon Musk, who indicated that it is necessary to decelerate the development of their most advanced and profitable models, referencing the increasing risks associated with the technology. Proceeds from ByteDance’s loan will be allocated for general corporate purposes, as the company enhances its AI aspirations. ByteDance’s most recent loan arrangement occurred in 2024, during which it secured $10.8 billion through approximately 20 lenders.
Its latest loan ranks as Asia’s second-largest dollar-denominated borrowing this year, following SoftBank Group Corp.’s $40 billion bridge loan finalised in March. It provides an initial margin of 68 basis points above the Secured Overnight Financing Rate, which will be subject to adjustment should the tenor be extended. In comparison, SoftBank’s bridge loan would incur an initial margin of approximately 250 basis points over the same benchmark.
