SoftBank Raising JPY 550 billion Amid Management Rejig

Masayoshi Son is a Visionary Capitalist. He has a vision of blooming of Information Revolution in 21st Century and under his leadership SoftBank Group (SBG) is focussing on AI which may emerge as most significant component of   Information Revolution

SoftBank has issued 5th Unsecured Subordinated Corporate Bond. Issue intends to raise JPY 550 billion and carries an interest rate of 2.48% per annum. Nomura Securities, Mizuho Securities, SBI Securities, Tokai Tokyo Securities, IwaiCosmo Securities, Mito Securities and various others are Underwriters to the issue.

SoftBank cash reserves have decreased due to previous repayment of borrowing in December 2021. Funds will be used as part of cash reserves for further redemption of the domestic subordinated bond which will be maturing in February 2022 and a for repayment of domestic senior bond which will mature in December 2022.

Bond carries rating of BBB+ by Japan Credit Rating Agency Ltd and Aozora Bank is acting as a trustee for the issue. Bonds will be offered to Individual Investors through offering in Japanese Market. SoftBank is not offering any Collateral or Guarantee on the issuance. Bonds are unsecured in nature as no collaterals have been set up for the Bond and no assets have been specifically reserved to secure the Bond.

Offering period of the Bond is for two weeks. offering has opened on January 21, 2022 and will close on February 3, 2022. Issue dates of the Bond will be February 4, 2022. Bonds are denominated at JPY 1 million per Bond and issuance as well as the redemption will be at 100% of the denomination per bond. Funds are being raised for seven years before it matures in February 2029.

Bonds will be Subordinate in nature and trigger event /Specific terms of subordination has been specified for redemption and payment of interest of the Bond in any of the event i.e. liquidation of SoftBank, filing for bankruptcy, reorganization or rehabilitation under Japanese law or any other jurisdiction’s law. Offerings will be limited to Japanese Market and will not be sold in the US Market.

As the offerings are in process, SBG COO MR Marcelo Claure has decided to leave the group after nine-year stint with the group. SBG has officially confirmed it but silent about the reasons behind it. Media reports have suggested that exit is led by the compensation dispute. Claure has helped SBG in turnaround of Sprint, merger of T-Mobile and Sprint, repositioning of WeWork, etc Michel Combes who is a French former telecoms executive and a deputy to Marcelo Claure has been appointed as CEO of SBG.

Softbank has seen departure of top executives in the past and have successfully navigated through Management Changes as well as crises, driving towards achieving its vision.  

Bureau Galactik View

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