Post by : Badri Ariffin

SoftBank Group Corp has launched a bond sale worth $10 billion in U.S. dollar-denominated senior unsecured notes and €1 billion ($1.15 billion) in euro-denominated notes, according to a term sheet seen on Monday. The funds are being raised mainly to support the Japanese technology group's investment in OpenAI.

The planned dollar bond issue is divided into three maturities: 3-1/2 years, 5-1/2 years and 7-1/2 years. The euro notes will have maturities of four years and six years.

Record-Size Corporate Bond Deal in Asia Pacific and Japan

If completed at the planned size, the offering would become the largest non-financial corporate bond deal in Asia Pacific and Japan on record, according to LSEG data.

The transaction would surpass the $10.93 billion bond sale by 7-Eleven Inc in January 2021.

The deal would also be among the 20 largest corporate bond transactions globally so far this year, based on Dealogic data.

SoftBank said it had no comment on the term sheet.

Bonds to Fund SoftBank's OpenAI Payment

The proceeds will be used to help fund SoftBank's $10 billion payment for the third tranche of its follow-on investment in OpenAI. The investment is expected to close on October 1.

The term sheet also said the proceeds would be used for general corporate purposes.

SoftBank had previously arranged a $10 billion bridge loan facility to finance its OpenAI investment. According to the term sheet, the new bond issuance will replace that bridge financing.

Bond Pricing and Settlement Dates

The bonds are expected to be priced on September 24 and settled on September 29, according to the term sheet.

Fitch Gives Proposed Notes BB+ Rating

Fitch Ratings has assigned the proposed notes a BB+ rating.

In a note, Fitch said it expects SoftBank's debt to increase as the company funds its committed investments. It also said SoftBank should maintain adequate liquidity and access to capital markets.

Read Also: Pakistani Air Raids in Afghanistan Kill Three, Officials Say

Banks Leading the Bond Offering

Citigroup is the lead bookrunner for the dollar-denominated notes, while JPMorgan is the lead bookrunner for the euro-denominated notes.

For the dollar notes, Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley are serving as joint global coordinators.

For the euro notes, JPMorgan, Deutsche Bank and Goldman Sachs are acting as joint global coordinators.

#world news #Global News