According to a filing with the Ministry of Finance dated today, the Japan-based wireless carrier SoftBank Corp. intends to sell bonds for the first time after it gave up the negotiations over the merger of Sprint Corp. and T-Mobile U.S. Inc.
In May 2014, ¥300 billion in five-year bonds were sold by the wireless carrier to individuals with a coupon of 1.45%. The notes were originally marketed with a coupon in the range of between 1.15% and 1.75%. In 2013, notes amounting to ¥700 billion were issued by the company to individual investors, plus notes of ¥120 billion to institutional investors.
Now SoftBank Corp. will offer five-year bonds estimated to ¥400 billion (3.9 billion dollars) to individuals. The company revealed in its filing that the debt will be priced on August 28th with the coupon ranging between 0.95% and 1.55%. SoftBank Corp.s US unit – Sprint – ended its acquisition negotiations with T-Mobile less than two weeks ago due to regulatory concerns.
The news of the bond issue comes at a time when SoftBank Corp. and its U.S.-based subsidiary Sprint Corp. have chosen to work in collaboration with Sharp Corp. to develop low-cost smartphones as SoftBank is seeking to expand its offerings in the US and Japanese markets.
Yoshiaki Adachi, a SoftBank manager in charge of product design, said in a statement cited by the Wall Street Journal: “We had received a number of offers from different vendors. That we would be able to make this offering exclusive was a large draw.”
SoftBank made a statement and shared that thanks to the scale it already has, it will be able to supply the smartphone exclusively and at an extremely low price.
SoftBank Corp. was up 0.44% on Monday to close the session in Tokyo at 7 043 Japanese yen per share, marking a one-year change of +14.15%. The carrier is valued at ¥8.42 trillion. According to the Financial Times, the 11 analysts offering 12-month price targets for SoftBank Corp. have a median target of ¥9 800, with a high estimate of ¥10 200 and a low estimate of ¥7 800. The median estimate represents a 39.76% increase from the previous close of ¥7 012.
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