SoftBank to Borrow Almost $4 billion Against T-Mobile Stake

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SoftBank Group Corp. will borrow about $4 billion through a pair of margin loans secured by the bulk of its stake in T-Mobile US Inc., according to a regulatory filing. 

The Japanese company, which holds 106.3 million T-Mobile shares, announced earlier this week that it had  agreed to swap about 45 million of those shares for a 4.5% stake in Deutsche Telekom AG. The deal expressly allows SoftBank to borrow against  its T-Mobile stake as long as Deutsche Telekom gets to vote the shares pledged as collateral.  

A SoftBank affiliate called Project 6 LLC will take out a $2.6 billion margin loan secured in part by about 43 million T-Mobile shares and a second $1.25 billion bridge loan backed by another 45.4 million T-Mobile shares, according to a Schedule 13D filed with the U.S. Securities and Exchange Commission.

SoftBank will fully draw both loans on September 15, the company said in the filing. The margin loan matures in July 2024 and the bridge loan comes due in two months, on November 14. The lending group includes JPMorgan Chase Bank NA and Goldman Sachs Group Inc.

The Deutsche Telekom deal has rekindled hopes among SoftBank shareholders that the company, founded by Masayoshi Son, will embark on another share buyback. Son divested some of SoftBank’s T-Mobile holdings last year through a $21 billion deal that helped pay for a record buyback of his company’s shares.

©2021 Bloomberg L.P.

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