SoftBank Hires Nomura for Up to $3.8 Billion Sale of Yen Bonds

(Bloomberg) -- SoftBank Group Corp. has tapped Nomura Holdings Inc. as lead manager for a domestic bond sale to raise as much as 400 billion yen ($3.8 billion) in what could be one of the biggest in the local corporate bond market, said people familiar with the matter.

The Japanese conglomerate is preparing to sell 300 billion yen to 400 billion yen of seven-year notes to individuals, and may set the bond's marketing range as early as this month, for issuance in September, said the people who asked not to be identified because the matter hasn't been made public yet. SoftBank, which last month unveiled plans for a second enormous technology fund, has a 400 billion yen bond due Sept. 12.

Spokesmen at SoftBank Group and Nomura declined to comment.

Founder Masayoshi Son has transformed SoftBank into a technology investment juggernaut in recent years, and the company said last month it will commit $38 billion of its own capital to a second Vision Fund, following its first unprecedented effort. The main purpose of the planned bond sale is for refinancing, and SoftBank has already hired several underwriters for the deal.

SoftBank is also considering a bond offering to institutional investors that may include seven-year and 10-year notes, according to people familiar with the matter. The company registered to sell yen bonds at the start of last month, according to a regulatory filing.

The Vision Fund injection is unlikely to affect the company's current rating, even if financed entirely with debt, according to S&P Global Ratings last month. Both S&P and Moody's Investors Service rate SoftBank with their highest speculative-grade rating.

Read more about Son's big plans for his investment portfolio

The new investment vehicle, which is targeting $108 billion of fundraising, is a “manifestation of an extremely aggressive growth strategy and underlying financial policy that are likely to continue to restrain its credit quality,” S&P said in a statement on July 26.

The technology company raised 500 billion yen in April, a record amount in the domestic debt market, by selling bonds at a coupon of 1.64% to individual investors in Japan. The issuance was fully subscribed on the first day of a planned two-week sales period.

SoftBank has an A- rating from Japan Credit Rating Agency Ltd. and is the single biggest issuer of yen debt in the local corporate bond market during the past five years, with the majority of that raised from individuals. It has sold more than 3.5 trillion yen of bonds in the domestic market during that period.

To contact the reporters on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net;Issei Hazama in Tokyo at ihazama@bloomberg.net

To contact the editors responsible for this story: Takashi Amano at tamano6@bloomberg.net, Finbarr Flynn, Beth Thomas

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