SoftBank continues to borrow ahead of large bond repayments

The company prices $4.1 billion subordinated bond targeting individual investors at 2.4%

Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., gestures while speaking during a news conference in Tokyo, Japan, on Wednesday, May 9, 2018. SoftBank Group Corp.’s fourth-quarter profit topped analysts’ projections, thanks to Sprint Corp.’s first annual net income in more than a decade. The U.S. wireless subsidiary is planning to merge with rival T-Mobile US Inc. Photographer: Noriko Hayashi/Bloomberg
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SoftBank Group sold the biggest yen note in the Japanese corporate bond market this year, continuing a global funding spree as it faces hefty debt redemptions in the next six months.

Billionaire Masayoshi Son’s technology conglomerate on Friday priced a 450 billion yen ($4.1 billion) subordinated bond targeting individual investors at 2.4 per cent, together with a 50bn yen note for institutional investors, according to filings. The company has about 1.2 trillion yen of bond repayments due in its home market before the end of February, including planned early redemptions, according to data compiled by Bloomberg.

SoftBank is having one of its busiest years in global issuance markets and raised more than $7bn in a debt offering across dollars and euros in June. The company’s global presence has expanded in recent years since Mr Son turned its focus to investing in start-ups and listed companies. That has exposed investors to greater financial market volatility and movements in the company's stock price.

Its share price rose in Tokyo this week after investor bets grew for a stock repurchase programme, after the announcement of a complex deal with Deutsche Telekom AG involving T-Mobile US. SoftBank will borrow about $4bn through a pair of margin loans secured by the bulk of its stake in T-Mobile US, according to a US regulatory filing this week.

The company last month reported a slump in net income to 761.5bn yen in the three months ended June 30 after the value of investments in public holdings such as Coupang declined.

Only a handful of bonds with annual coupons of 2 per cent or more are sold in the Japanese domestic corporate debt market, and the last issuer to price at that level this year was SoftBank Group itself with a 405bn yen subordinated note in June. The debt also offers extra yield because it has a lower priority for repayment than senior notes and a worse expected credit rating as a result.

Updated: September 10, 2021, 9:43 AM