SoftBank's Plan Raises Doubts on $33-Billion Bond Guarantees
- Firm may need to cancel debt guarantees to list unit: JCR
- SoftBank’s bond-default risk is among the highest in Japan
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Billionaire Masayoshi Son’s plan to list his cash-cow Japanese telecom business is raising concern among observers that the company might stop guaranteeing the debt of its parent SoftBank Group Corp., worsening the quality of its credit.
The mobile division SoftBank Corp. assures payments to investors on $33.4 billion in bonds of its parent, which is rated junk by Moody’s Investors Service and S&P Global Ratings, according to Bloomberg-compiled data. The unit needs to prove its independence to get listed on the Tokyo Stock Exchange, meaning that it probably would have to cancel the guarantees to pass the test, according to Japan Credit Rating Agency and Asahi Life Asset Management.