TOKYO: SoftBank Group Corp priced the biggest Japanese corporate bond deal of the year in a sale targeted at individuals.
The technology conglomerate sold 405 billion yen (US$3.7bil or RM15.25bil) of debt securities that mature in 2056 but which are callable after five years, at an interest rate of 2.75%, according to a statement from the company.
The notes are hybrid securities with characteristics similar to stocks and SoftBank expects rating firms to treat the issuance as 50% equity, it said.
The company led by billionaire Masayoshi Son recently posted the biggest-ever quarterly profit by a Japanese company after reaping gains from investments led by newly public Coupang Inc.
SoftBank has been the single-biggest issuer in the Japanese corporate bond market in the past decade, raising more than six trillion yen (US$55bil or RM226bil) with the bulk of that coming from retail investors.
At a time when depositors in Japan earn next to nothing on deposits because of the Bank of Japan’s negative-interest rate policy, SoftBank’s notes offer some of the highest coupons on debt from any local company.
The average yield on Japanese corporate bonds is about 0.3%, according to Nomura BPI data.
The funds from the current offering will be used for the redemption of existing debt, according to SoftBank.
Japan credit rating agency assigned in May a preliminary rating of BBB to the subordinated notes, two levels below SoftBank’s issuer rating. — Bloomberg