China’s Alibaba Group Holding Ltd plans to raise at least $5 billion through the sale of a U.S. dollar-denominated bond this month, four people with knowledge of the matter said, amid regulatory scrutiny of co-founder Jack Ma’s empire.

Depending on investor response, proceeds could reach $8 billion which the e-commerce leader is likely to use for general corporate expenditure, one of the people said.

The fundraising will be a test of investor sentiment towards Alibaba, amid a regulatory crackdown on it and financial technology affiliate Ant Group.

Chinese officials have come down hard on Ma’s business empire since he publicly criticised the country’s regulatory system in October setting off a chain of events that resulted in the halting of Ant Group’s $37 billion stock market listing.

Ma’s absence from public view in the intervening time has fuelled social media speculation over his whereabouts.

The bond sale plan, including timeline, is not finalised and is subject to change, the people said, declining to be identified as they were not authorised to speak to the media.

Alibaba declined to comment.

Since Ma’s speech, Chinese regulators have begun an antitrust probe into Alibaba and ordered fintech Ant to change its lending and other consumer finance businesses, including the creation of a holding company to meet capital requirements.

U.S. President Donald Trump has also ratcheted up tensions, moving to ban transactions with eight Chinese software applications, including Ant Group’s Alipay mobile payment app.

Chinese regulators are also reviewing Ant’s equity investments in dozens of companies and considering whether to instruct the firm to divest some of those investments, Reuters has reported.

“Investors will need Jack Ma to make some sort of public appearance to give them confidence for the bond to be well received,” said an Asia credit analyst with a European bank, who was not authorised to speak to the media and so declined to be identified.

“Given Alibaba’s current situation they’ll need to price it at a premium,” the analyst said. “But in the long term Alibaba is still a company worth investing in.”

Alibaba’s Hong Kong-listed shares rose as much as 4% on Wednesday, versus a 0.4% decline in the benchmark index. The stock’s price had fallen 5.6% over the last three sessions.
Last month, Alibaba said it would increase the value of a share repurchase programme to $10 billion from $6 billion.

DEBT MARKET BOOM

Alibaba’s international bond offering, if finalised, would be the group’s third, Refinitiv data showed. It sold an $8 billion U.S. dollar bond in 2014, and a $7 billion tranche in 2017, the data showed.

With its latest bond sale, Alibaba will join a slew of Asian companies that in recent months have taken advantage of cheaper borrowing costs and abundant liquidity in global markets.

Companies sold was $363.2 billion worth of U.S. dollar bonds in Asia last year, 9% more than a year earlier and the highest value on record, Dealogic data showed.

The terms of Alibaba’s offering were not immediately known. Two of the people said the tenure is likely to be 10 years and that marketing documents were likely to be available as soon as next week.

One of the people involved in the deal said Alibaba wanted to use the issuance to send a message to the market that “in the light of the latest regulatory scrutiny, the firm is still doing fine and has the backing of some investors”.

LightStream Research analyst Oshadhi Kumarasiri, who publishes on the Smartkarma platform, said Alibaba has about $10 billion worth of long-term debt due in November so it makes sense to refinance it - even if timing suggests this is about instilling confidence.

“However, I’m more pragmatic and would still be worried to go long on Alibaba with the current regulatory scurrility.”