Baidu Announces Plan to Offer Senior Notes

China-based technology company Baidu, Inc. (BIDU) has announced a proposal to offer senior notes. The company has filed a preliminary prospectus supplement with the U.S. Securities and Exchange Commission under an automatic shelf registration statement.

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Baidu plans to use net proceeds from the offering for general corporate purposes, including repayment of certain existing debts.

Further, a portion of the notes will be issued as sustainable bonds since Baidu seeks to use an equivalent amount of the net proceeds to finance or refinance one or more of Eligible Projects, pursuant to its Sustainable Finance Framework.

Goldman Sachs (Asia), BofA Securities and J.P. Morgan Securities are the joint bookrunners of the offering. (See Baidu stock charts on TipRanks)

Following the announcement, Fitch Ratings assigned an A rating to the proposed senior unsecured notes. The rating is in line with Baidu’s senior unsecured rating of A as they will rank pari passu with its existing and future senior unsecured debt.

On August 12, Baidu delivered upbeat financial results for Q2. Earnings per share grew 5% year-over-year to $2.39, beating consensus estimates of $2.07. Additionally, revenue was up 20% to $4.86 billion and surpassed consensus estimates of $4.78 billion.

Following the release, Oppenheimer analyst Jason Helfstein reiterated a buy rating on the stock and lowered the price target to $320 from $355. The new price target implies 118.3% upside potential.

Based on 15 Buys, 3 Holds and 1 Sell, the stock has a Moderate Buy consensus rating. The average Baidu price target of $268.24 implies 83% upside potential from current levels. Shares have gained 18.3% over the past year.