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SoftBank's Giant Debt Burden Looks Worse Than It Actually Is

  • Leverage very conservative based on loan-to-value ratio: Daiwa
  • Company has used gauge in investor presentations since 2017
Inside SoftBank's Omotesando Store Ahead Of Earnings
Photographer: Kiyoshi Ota/Bloomberg
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As SoftBank Group Corp. continues its transformation into a giant investment fund, some analysts are increasingly watching a metric more familiar to lenders as they judge its creditworthiness. And by that gauge, they say, its massive debt pile looks manageable.

SoftBank’s loan-to-value ratio, its net interest-bearing debt over the value of its investment portfolio, is less than 20 percent, according to separate calculations by Daiwa Securities Group Inc. and SMBC Nikko Securities Inc. The company’s own goal is to keep it under 35 percent, a level that Daiwa considers conservative.