Lenovo to Raise $2 Billion from International Banks to Reduce Debt Costs

Lenovo Group plans to raise a loan of $2 billion with a lower servicing cost than its previous financing instrument. The five-year loan has already been syndicated with a margin of 75 basis points over the Secured Overnight Financing Rate (SOFR), which is more favorable than a similar loan from 2022 with a margin of 110 basis points. Asian banks are actively lending to large companies from China amid a downturn in the loan market, where only 54 offshore loan agreements by Chinese companies have been recorded this year, the lowest in 17 years. The total borrowing volume has increased to $56.1 billion, thanks to ByteDance's loan of $29.6 billion with a margin of 68 basis points. The coordinators of Lenovo's new credit program are BNP Paribas, Citigroup, DBS Bank, HSBC Holdings, and JPMorgan Chase Bank Hong Kong. The entry into the borrowing market coincides with a 43% increase in the company's revenue in the last quarter; however, Lenovo's shares fell by 25% in October due to investor concerns about the rapid expansion of AI projects.

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