$3 billion! Meituan's largest bond issuance in history to replenish ammunition for the "takeout war."

In the face of an increasingly fierce price war in China's food delivery and local retail markets, Meituan is planning to launch the largest regular bond issuance in the company's history, seeking to raise approximately $3 billion to replenish its financial "ammunition" in this war of attrition. Meituan disclosed in an announcement on the exchange on Monday that it plans to issue senior notes denominated in both US dollars and Chinese yuan. According to media reports, Meituan's goal is to sell approximately $2 billion in US dollar notes, as well as an equivalent of $1 billion in offshore yuan notes. This issuance could be marketed as early as this Tuesday, but specific details may be adjusted based on investor feedback. According to the announcement, the funds raised will primarily be used for refinancing existing offshore debt and meeting general corporate operational needs. Data compiled by Bloomberg shows that a $750 million bond from Meituan is set to mature this Tuesday, and this financing will provide critical support for its balance sheet management. Since the beginning of this year, industry giants including Alibaba Group and JD.com have launched significant discounts and incentive measures, intensifying market competition and putting pressure on Meituan's stock performance. The $3 billion financing will also become the largest regular bond issuance in Meituan's history. According to media compiled data, Meituan first entered the US dollar bond market in 2020, issuing $2 billion in bonds. In 2021, the company issued $2.98 billion in convertible bonds. Last year, Meituan returned to the US dollar bond market, raising a total of $2.5 billion through the issuance of two notes. After repaying the $750 million bond maturing this week, Meituan's next major offshore regular bond will mature in 2028. Rating agency Fitch has assigned a "BBB+" rating to the US dollar bonds that Meituan plans to issue, which is consistent with the rating of Meituan's existing senior unsecured bonds. However, Fitch has adjusted Meituan's rating outlook from "positive" to "stable." Fitch pointed out that due to the intense market competition in the food delivery and flash purchase business segments, Meituan's revenue growth is expected to slow in the short term, and its profitability and ability to generate free cash flow will also weaken accordingly. Despite the short-term pressure, Fitch is optimistic about Meituan's long-term prospects. The agency expects the intensity of this price war to ease in the next 6 to 12 months. Fitch believes that with its extensive merchant network, reliable delivery capabilities, deep local market experience, and ample net cash, Meituan can maintain its strong market leadership position in the core local business sector and is expected to restore positive free cash flow by 2026