Fitch Ratings has given A+ ratings to Alibaba Group Holding's (HKG:9988) proposed US dollar and offshore yuan senior unsecured bonds, according to a Sunday release.

The rating is similar to Alibaba's A+ senior unsecured rating, as they rank equally with the company's existing and future senior unsecured debt.

The outlook is negative, aligning with China's sovereign rating and reflecting the company's domestic focus and government internet regulation.

Alibaba's leadership in China's e-commerce and cloud computing markets supports its ratings, with Fitch expecting its monetization focus and user-first strategy to stabilize market share.

The company also surpasses most of its Chinese and global internet peers due to its superior cash generation and stronger balance sheet.

The company is committed to shareholder returns with its ongoing share repurchases and declared dividends, but it also remains conservative with its capital structure and holds a substantial net cash position, Fitch said.

However, the company's variable interest entity (VIE) structure, entailing that it does not directly own its operating subsidiaries, and surrounding regulatory changes are potential credit weaknesses, according to Fitch.

A revision of China's outlook to stable amid continued strong leverage or cash position could lead to an upgrade, while a downgrade could stem from a similar sovereign action, major regulatory intervention, or significant market share loss.