SoftBank Group Plans Big Yen Bond Sale as Funding Costs Drop

(Bloomberg) -- SoftBank Group Corp. is planning to sell what could be Japan’s biggest yen corporate bond so far this year, tapping strong demand for its debt from individual investors as borrowing costs drop.

The technology investment company plans to price 450 billion yen ($4.1 billion) of subordinated bonds due in 2028 on Sept. 10, and the debt will target retail investors to refinance existing bonds, according to a regulatory filing. That would follow a 405 billion yen junior debt sale to individuals in June that was the nation’s largest company note this year.

SoftBank is coming to the market as falling funding costs help prompt a rush among Japanese firms to sell bonds, with deals last month surging to the most for an August on record, according to Bloomberg-compiled data. Yield premiums on Japanese corporate notes have dropped to the least since 2015, Nomura BPI data show.

SoftBank’s bond offering would come as the earnings of its Vision Fund faces pressure due to the tech sector crackdown by Chinese regulators causing firms it invested in to surrender gains.

Billionaire Masayoshi Son’s company may have to rely on Vision Fund distributions, cash, borrowings and asset sales to service debt as its largest recurring income - dividend from SoftBank Corp. - can no longer cover interest costs, Bloomberg Intelligence analyst Sharon Chen wrote in a report.

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