SoftBank raises $7.35bn in jumbo offshore bond deal
Japanese tech giant's debt offering in dollars and euros is the second biggest from Asia in 2021
01 July 2021 - 11:52
byFinbarr Flynn
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SoftBank Group priced the second-biggest offshore bond deal from Asia this year, raising about $7.35bn in a dual-currency debt offering.
The Japanese technology giant sold $3.85bn of dollar-denominated debt and €2.95bn of notes on Wednesday, making it second in size only to a deal by Nippon Telegraph & Telephone in February. It was the first overseas debt deal by SoftBank since 2018.
SoftBank posted the biggest-ever quarterly profit by a Japanese company earlier this year, driven by gains at its investment arm. The company, founded and led by Masayoshi Son, came to market at an ideal time with yields on junk-rated dollar debt in the US at a record low and tech stocks near a record high. Still, the prospect of higher interest rates ahead poses a potential headwind for one of Japan’s most heavily indebted companies.
SoftBank, which has a speculative-grade score of BB+ from S&P Global Ratings, said it plans to use the proceeds from Wednesday’s bond deal to repay existing debt and for general corporate purposes. The issuer received the equivalent of more than $16bn of demand from over 400 investors for the offering, according to a spokesperson.
SoftBank’s first priority for cash is likely to remain “speculative and high-risk investments”, potentially via stake purchases in private companies through one of its investment funds, CreditSights analysts Mary Pollock and Oliver Burke wrote in a note. They preferred exposure to the company’s short-duration debt given it has less potential for repricing if Son’s strategy or a shift in risk sentiment surprise to the downside for creditors.
SoftBank has sold about $12.7bn of bonds this year, making it the biggest junk-rated corporate issuer of debt in the world in the first half, according to data compiled by Bloomberg.
It priced ¥405bn of notes in June in the biggest sale of the year in its home market. Japan Credit Rating Agency rates the issuer and its recent yen note offerings as investment grade.
Bloomberg News. More stories like this are available on bloomberg.com
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
SoftBank raises $7.35bn in jumbo offshore bond deal
Japanese tech giant's debt offering in dollars and euros is the second biggest from Asia in 2021
SoftBank Group priced the second-biggest offshore bond deal from Asia this year, raising about $7.35bn in a dual-currency debt offering.
The Japanese technology giant sold $3.85bn of dollar-denominated debt and €2.95bn of notes on Wednesday, making it second in size only to a deal by Nippon Telegraph & Telephone in February. It was the first overseas debt deal by SoftBank since 2018.
SoftBank posted the biggest-ever quarterly profit by a Japanese company earlier this year, driven by gains at its investment arm. The company, founded and led by Masayoshi Son, came to market at an ideal time with yields on junk-rated dollar debt in the US at a record low and tech stocks near a record high. Still, the prospect of higher interest rates ahead poses a potential headwind for one of Japan’s most heavily indebted companies.
SoftBank, which has a speculative-grade score of BB+ from S&P Global Ratings, said it plans to use the proceeds from Wednesday’s bond deal to repay existing debt and for general corporate purposes. The issuer received the equivalent of more than $16bn of demand from over 400 investors for the offering, according to a spokesperson.
SoftBank’s first priority for cash is likely to remain “speculative and high-risk investments”, potentially via stake purchases in private companies through one of its investment funds, CreditSights analysts Mary Pollock and Oliver Burke wrote in a note. They preferred exposure to the company’s short-duration debt given it has less potential for repricing if Son’s strategy or a shift in risk sentiment surprise to the downside for creditors.
SoftBank has sold about $12.7bn of bonds this year, making it the biggest junk-rated corporate issuer of debt in the world in the first half, according to data compiled by Bloomberg.
It priced ¥405bn of notes in June in the biggest sale of the year in its home market. Japan Credit Rating Agency rates the issuer and its recent yen note offerings as investment grade.
Bloomberg News. More stories like this are available on bloomberg.com
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