Wall Sreet banks are lending billions to Chinese tech firms in the hope of securing more lucrative mandates. After arranging billions of dollars in loans for highly valued – and money-losing – US startups like Uber Technologies Inc., banks including Morgan Stanley and Goldman Sachs Group Inc. are angling to do the same for some of China’s biggest unicorns. They helped Bytedance Ltd., owner of the wildly popular TikTok video app, borrow US$1.
Morgan Stanley, the lead sponsor of Uber’s IPO in May, earned US$41 million from that deal, about a year after the bank helped arrange a US$1.1 billion loan for the ride-hailing company, according to data compiled by Bloomberg. Dropbox Inc. tapped banks including Goldman for a US$600 million credit facility in 2017, people familiar with the matter said at the time, about a year before the cloud storage company went public. Goldman was one of the IPO’s lead underwriters.
Loans appeal to Chinese unicorns because they can be arranged quickly with few public disclosures, a plus for young companies that want to avoid giving away too much information to competitors, according to Andrew Ashman, the Singapore-based head of loan syndicate for the Asia Pacific at Barclays Plc.