Japan’s SoftBank says it may issue $9.8b in hybrid bonds

A man looks at his phone as he walks past an advertising poster of the SoftBank telecommunications company in Tokyo October 16, 2015. REUTERS/Thomas Peter

Japan’s SoftBank Group on Tuesday said it is considering selling around 1 trillion yen ($9.8 billion) worth of hybrid bonds in its current financial year through March to bolster its capital base and secure funds for future growth.

The announcement comes after the telecommunications and internet company agreed to buy British chip designer ARM Holdings PLC for $32 billion.

The money raised from the bonds would not be used for the ARM deal, as the company plans to finance that acquisition with cash at hand and a 1 trillion yen bridge loan from Mizuho Bank, a SoftBank spokesman told Reuters.

The Nikkei business daily reported earlier on Tuesday that SoftBank would issue half of the total to individual investors with a coupon of around 3 percent.

Hybrid bonds are often treated as quasi-equity by credit-rating firms, and so will allow SoftBank to raise capital without hurting its rating.

A manager at a midsize brokerage firm told Reuters that increasing interest-bearing debt was not an option for SoftBank because that would lead to credit downgrades as it did after the acquisition of U.S. mobile unit Sprint Corp.

As SoftBank has raised 1 trillion to 1.55 trillion yen annually over the last few years, “it could issue foreign bonds of around 500 billion yen (on top of the 1 trillion yen under consideration),” the manager said.

Also read:

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Softbank Group expects to invest several billions a year in promising start-ups

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.