August 18, 2014

Sprint parent selling first bonds after failed T-Mobile bid

The debt sale suggests that Tokyo-based SoftBankbid to acquire T-Mobile hasn’t damped his drive to raise funds to expand.

SoftBank Corp., the Japanese wireless carrier led by billionaire Masayoshi Son, plans to sell bonds for the first time after it abandoned talks to merge Sprint with T-Mobile US.

Son’s company is offering $3.9 billion of five-year notes to individual investors, and will price the debt on Aug. 28, it said in a filing to the Ministry of Finance Monday.

The debt sale suggests Son’s failure to make the U.S. acquisition hasn’t damped his drive to raise funds to expand. Overland Park-based Sprint, controlled by SoftBank, ended talks with T-Mobile less than two weeks ago on regulatory concerns, leaving Son with the U.S.’s No. 3 carrier in a market where it’s dwarfed by larger rivals.

“If it’s simply that SoftBank is raising funds at a cheap rate to refinance higher-cost debt, that would be extremely good” from a credit perspective, said Yusuke Ueda, a Tokyo- based credit analyst at Bank of America Merrill Lynch. “But that isn’t 100 percent sure, and we don’t know how much will be used for refinancing.”

The funds will be used to repay debt and to finance future investment, SoftBank spokeswoman Mariko Osada said by phone from Tokyo. The cash raising isn’t to finance specific mergers and acquisitions, she said.

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