SoftBank Group Corp. estimated its biggest-ever yen bond on Thursday, utilizing its popularity with retail investors to raise 550 billion yen ($4.8 billion) to pay off other debt. Billionaire Masayoshi Son’s technology conglomerate, which made headlines last year because of losses on Chinese ride-hailing giant Didi Global Inc., has been the single-greatest issuer in the Japanese corporate bond market in the previous ten years. It sold the new seven-year subordinated note at 2.48%, as per underwriter Nomura Securities Co.
The yield on SoftBank’s new bond is a touch higher than the 2.40% for the company’s 450 billion yen of subordinated notes issued last September, reflecting the rise in borrowing costs for Japanese companies this year as global central banks begin unwinding their crisis-era stimulus.
Son’s reputation for entrepreneurship means the company is popular among retail investors despite its high gearing. In comparison with payouts on Japanese government debt and notes from other local companies, its bonds offer attractive returns.
The prospect of higher interest rates also prompted a selloff in technology companies shares this month.
Bloomberg-compiled data show the company has at least $6.8 billion worth of bonds across currencies due this year including a note of more than 400 billion yen next month.
“The pricing level seems appropriate,” said Toshiyasu Ohashi, chief credit analyst at Daiwa Securities Co. “The impact from global interest rises on tech shares is a factor that could change SoftBank’s credit standing, but the company has been controlling its finances.”
The conglomerate has an A- investment-grade rating from Japan Credit Rating Agency, while S&P Global Ratings assigns it a junk rating.
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