ByteDance Ltd, the Chinese owner of TikTok, is tapping banks for a US$9.5 billion loan that would be the biggest dollar-denominated corporate facility in Asia ex-Japan, according to people familiar with the matter.

Citigroup, Goldman Sachs and JPMorgan are the coordinators of the latest financing, which carries a tenor of three years and can be extended to a maturity of up to five years, said the people, who asked not to be identified discussing a private matter.

ByteDance’s facility is larger than the earlier-anticipated size - an indication that the borrower is eager to take advantage of Asia’s loan market, which is flush with liquidity amid dismal deal flow.

Dollar loan volume, excluding bilateral facilities, tumbled 44% to about US$45.5 billion in the first half of the year across Asia excluding Japan. That’s the lowest level since 2010, according to data compiled by Bloomberg.

ByteDance didn’t respond to a request for comment.

Proceeds of the deal will be partly used to refinance an existing US$5 billion dual-tranche facility the group had raised in 2021, according to Bloomberg-compiled data. They will also be used for working capital purposes, the people said.

ByteDance’s new loan carries a greenshoe option that allows the size to expand beyond US$9.5 billion, the people said, adding that it pays an opening interest margin of 85 basis points over the benchmark Secured Overnight Financing Rate.

Founded in 2012, Beijing-based ByteDance has quickly become one of the leading social media companies in China with the widely used mobile-video application Douyin. It’s also the parent company of TikTok, the social-media app popular in the US, which has become a flashpoint in relations between the two countries in recent years.

ByteDance is looking to expand beyond its core business of online advertising into areas like e-commerce and generative AI. At home, it’s among a slew of local big-tech firms that has sunk billions of dollars into research and development of large language models and ChatGPT-style apps. Abroad, TikTok is planning to roll out its niche live shopping platform in more European markets, after initial success in the US.

  - Bloomberg