TOKYO – SoftBank Corp will decide as early as Monday to raise as much as 120 billion yen (S$1.1 billion) via Japan’s first public offering of bond-type class shares, according to people familiar with the situation.
The telecommunications unit of billionaire Masayoshi Son’s holding company will hold a board of directors’ meeting to approve sales of the new shares, said the people.
The securities give their holders no voting rights nor the right to convert them to common stock.
SoftBank’s representatives declined to comment.
The class shares will be listed on the Tokyo Stock Exchange and are likely to attract retail buyers because of SoftBank’s strong name recognition and a dividend rate estimated at 2 per cent to 4 per cent for the first five years.
Investors in the securities will also be able to enjoy tax exemption through the Nippon Individual Savings Account programme, or Nisa, the people said.
Interest rates in Japan remain at rock-bottom levels even after their global counterparts have risen, and the country’s central bank last week tamped down speculation of any near-term hikes.
That increases the need for investments with better returns, especially amid the risk that Japan’s 1,107 trillion yen pool of household savings may increasingly be drawn to higher-yielding investments abroad, further weighing on the yen.
The annual dividend rate of the class shares will fluctuate after the fifth year, and SoftBank has the right to repurchase them at an amount equal to the issue price.
The funds raised will be used for growth investments related to telecommunications and information technologies, as well as next generation social infrastructure.
The offering will be mainly aimed at individuals, as well as some institutional investors, according to the people.
SoftBank will likely announce details of the offering as early as Monday, including the actual amount, sale and pricing dates and underwriters, the people said.
It will conduct a book-building process with bond and equity investors to decide the terms, and Nomura Securities Co will be the lead underwriter for the deal, they said. BLOOMBERG
