SoftBank Group Prices Japan’s Biggest Corporate Bond of 2021

(Bloomberg) -- SoftBank Group Corp. priced the biggest Japanese corporate bond deal of the year on Thursday in a sale targeted at individuals.

The technology conglomerate sold 405 billion yen ($3.7 billion) of debt securities that mature in 2056 but which are callable after five years, at an interest rate of 2.75%, according to a statement from the company. The notes are hybrid securities with characteristics similar to stocks and SoftBank expects rating firms to treat the issuance as 50% equity, it said.

The company led by billionaire Masayoshi Son recently posted the biggest-ever quarterly profit by a Japanese company after reaping gains from investments led by newly public Coupang Inc. SoftBank has been the single-biggest issuer in the Japanese corporate bond market in the past decade, raising more than 6 trillion yen with the bulk of that coming from retail investors.

At a time when depositors in Japan earn next to nothing on deposits because of the Bank of Japan’s negative-interest rate policy, SoftBank’s notes offer some of the highest coupons on debt from any local company. The average yield on Japanese corporate bonds is about 0.3%, according to Nomura BPI data.

The funds from the current offering will be used for the redemption of existing debt, according to SoftBank. Japan Credit Rating Agency assigned in May a preliminary rating of BBB to the subordinated notes, two levels below SoftBank’s issuer rating.

(Updates with details on ratings)

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