Credit-rating firm Moody’s outlook revision reignites SoftBank spat

REUTERS/Issei Kato

Credit-rating firm Moody’s Investors Service on Friday revised its outlook for SoftBank Group Corp to “negative” from “ratings under review”, three months after making a two-notch downgrade that caused a public spat with the tech conglomerate.

The revision to the outlook represents a doubling-down by Moody’s after it cut SoftBank deeper into junk territory in March – leading to the indebted conglomerate taking the unusual step of asking for its rating to be withdrawn.

SoftBank in a statement said it “has provided no information to Moody’s”, and that it is “unclear what Moody’s intention is” or “what information it uses” to make its assessment.

On Thursday, SoftBank said it has raised $35 billion by selling down assets including part of its stake in China’s Alibaba Group Holding Ltd to fund share buybacks and pay down debt – a figure representing 80% of its planned total.

“Major asset sales have been announced but given the structured nature of the transactions, cash proceeds may not all yet have been received or applied towards debt reduction,” Moody’s said.

SoftBank’s preference for complex financial transactions like collateralised margin loans “signals a heightened tolerance for risk and financial complexity,” Moody’s continued.

The concerns follow peer S&P Global Ratings which earlier this month said SoftBank’s 2.5 trillion yen ($24 billion) buyback plan – launched to stabilise the firm’s stock price after its tech investments faltered – raised doubts about “financial soundness and creditworthiness”.

($1 = 107.1200 yen)

Reuters

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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.