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Bond Market News
SoftBank to Redeem $2bn 6% Perp Callable in July and Remove Extension Risk
May 30, 2023
SoftBank Group has decided to call back its outstanding $2bn 6% Perp on its first call date of July 19. The bond is currently trading at 99.5, yielding 9.4% to call. SoftBank had recently issued JPY 222bn ($1.6bn) of local bonds and at the time, it said that part of the proceeds would be used to redeem its dollar debt. The move to redeem the notes thus removes doubts about extension risk (Term of the Day, explained below) that could affect bondholders. It had initially issued $2.75bn of the notes in July 2017 and in October 2022, it bought back $750mn of the notes as part of a larger $2.265bn buyback offer for its USD and EUR-denominated bonds. SoftBank was recently downgraded to BB from BB+ by S&P and its perps to B from BB-. It hit back at the rating agency saying that its “financial soundness was not properly assessed”.
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