424B2
BAIDU, INC. filed this Form 424B2 on 06/29/2017
Entire Document
 


Table of Contents

BAIDU, INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The 2017 Notes bear interest at the rate of 2.25% per annum and the 2022 Notes bear interest at the rate of 3.50% per annum. Interests are payable semi-annually in arrears on and of each year, beginning on May 28, 2013. The 2018 Notes bear interest at the rate of 3.25% per annum. Interests are payable semi-annually in arrears on and of each year, beginning on February 6, 2014. The 2019 Notes bear interest at the rate of 2.75% per annum. Interests are payable semi-annually in arrears on and of each year, beginning on December 9, 2014. The 2020 Notes bear interest at the rate of 3.00% per annum and the 2025 Notes bear interest at the rate of 4.13% per annum. Interests are payable semi-annually in arrears on and of each year, beginning on December 30, 2015. At maturity, the Notes are payable at their principal amount plus accrued and unpaid interest thereon.

The Notes do not contain any financial covenants or other significant restrictions. In addition, the Notes are unsecured and rank lower than any secured obligation of the Group and have the same liquidation priority as any other unsecured liabilities of the Group, but senior to those expressly subordinated obligations, if any. The Company may, at its discretion, redeem all or any portion of the Notes at any time, at the principal amount plus any unpaid interest. As of March 31, 2017, the Company does not intend to redeem any portion of the Notes prior to the stated maturity dates. The Company has the obligation to redeem the Notes if a change in control occurs as defined in the indenture of the Notes.

The Notes were issued at a discount amounting to RMB74.36 million (US$10.80 million). The issuance costs of RMB149.59 million (US$21.73 million) were presented as a direct deduction from the principal amount of the Notes on the consolidated balance sheets. Both the discount and the issuance costs are amortized as interest expense using the effective interest rate method through the maturity dates of the Notes. The effective interest rate was 2.36%, 3.39%, 3.00%, 3.13%, 3.59% and 4.22% for the 2017 Notes, the 2018 Notes, the 2019 Notes, the 2020 Notes, the 2022 Notes and the 2025 Notes, respectively.

The principal amount and unamortized discount and debt issuance costs as of December 31, 2016 and March 31, 2017 are as follows:

 

     As of December
31, 2016
     As of March 31,
2017
     As of March 31,
2017
 
     RMB      RMB      USD  
     (In thousands)  
     (unaudited)  

Principal amount

     32,987,800        32,766,450        4,760,351  

Unamortized discount and debt issuance costs

     (136,008      (124,373      (18,069
  

 

 

    

 

 

    

 

 

 
     32,851,792        32,642,077        4,742,282  
  

 

 

    

 

 

    

 

 

 

Subsidiaries – iQiyi

On January 25, 2017, iQiyi issued US$1.53 billion of convertible notes (the “iQiyi Notes”) in a private placement, among which US$300.00 million was purchased by the Company and the remaining US$1.23 billion was purchased by external investors. The iQiyi Notes bear interest at a coupon rate of 1.50% per annum with a maturity date of January 25, 2018. The iQiyi Notes can be converted into preferred shares in a qualified financing or at iQiyi’s election. The conversion option does not meet the definition of a derivative under ASC 815.

 

10. INCOME TAXES

The Company is incorporated in the Cayman Islands and conducts its primary business operations through the subsidiaries and VIEs in the PRC. It also has intermediate holding companies in the BVI and

 

F-28