SoftBank Plans Japan's Biggest Yen Company Debt Sale Since Marchby
Wireless giant marketing 370 billion yen of seven-year bonds
Debt issuance follows Moody's rating cut in September
SoftBank Group Corp. plans to sell a 370 billion yen bond ($3 billion) later this month in what would be the biggest issuance by any borrower in Japan’s corporate bond market since March as it struggles to make U.S. unit Sprint Corp. profitable.
SoftBank, led by Japan’s second-richest man Masayoshi Son, is marketing seven-year notes with a coupon of 1.75 percent to 2.35 percent to individual investors, according to a regulatory filing Tuesday. The Japanese wireless carrier plans to price the securities on Nov. 26.
SoftBank, including Sprint, has already sold the equivalent of more than $10 billion in bonds this year, according to data compiled by Bloomberg. Son has built SoftBank into one of the world’s most acquisitive companies, plowing cash from domestic mobile operations and borrowings into more than 1,000 companies from Alibaba Group Holding Ltd. and Sprint to game maker Supercell Oy.
Hiroe Kotera, a spokeswoman for SoftBank in Tokyo, said by phone that the company plans to use the yen bond’s proceeds to refinance debt and for investments, without elaborating.
SoftBank had 9.68 trillion yen in net debt at the end of September, up from 8.35 trillion yen at the end of March, the Bloomberg-compiled data show. Moody’s Investors Service on Sept. 15 cut Sprint’s rating by two levels to B3, its sixth-lowest non-investment grade, citing challenges in stabilizing operations at the U.S. company.
SoftBank had operating income of 342.2 billion yen in the three months through September, with wireless customers at home making up for widening losses at Sprint. Son expressed confidence this month in turning around the fourth-largest U.S. wireless carrier, which has booked losses in all but one quarter over the past two years.
Sprint posted a net loss for the fiscal second quarter that was more than twice the average projected by analysts, after the company lured new subscribers with price-cutting promotions.