SoftBank to Issue $1.6 Billion Bond with Record-High Coupon Rate
SoftBank Group Corp. Issues Yen-Denominated Bond with Record Coupon Rate
SoftBank Group Corp. has set terms for a subordinated bond offering with the highest coupon yet on its yen-denominated debt. The Japanese conglomerate is planning to sell a ¥260 billion ($1.6 billion) bond, primarily targeting individual investors. The bond's coupon rate for the initial five-year period has been set at 5.12%, a significant increase from the 4.97% rate of its first retail bond offering this fiscal year in April.
The bond sale is part of SoftBank Group's efforts to secure funding for its accelerated investments in artificial intelligence, including a significant stake in OpenAI, the US-based provider of ChatGPT. In April, the company successfully raised ¥418 billion through a subordinated bond issue. With this new bond sale, SoftBank Group has sold a total of approximately $7.7 billion in euro, yen, and dollar-denominated debt so far this calendar year.
Key details of the bond offering include a final maturity of 35 years and a call option for the issuer after five years. The joint lead managers for the bond sale are SMBC Nikko Securities, Mitsubishi UFJ Morgan Stanley Securities, SBI Securities, Nomura Securities, and Mizuho Securities.
| Year | Total Bond Sales (approx.) | April Subordinated Bond Issue |
|---|---|---|
| 2024 | $7.7 billion | ¥418 billion |
| (5.12% coupon rate) | ||
| (5-year initial period) |
The bond sale is expected to provide SoftBank Group with the necessary funding to further its investments in artificial intelligence and other strategic areas.
Investor Takeaway
SoftBank Group Corp. is issuing a $1.6 billion bond with a record-high coupon rate, which may impact investors' expectations and market trends.
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