Softbank Corp Raises $800 Million Via Japan’s First Bond-Type Shares Listing

02 November 2023

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SoftBank Corp Raises $800 Million in Landmark Bond-Type Share Listing in Japan.

In a groundbreaking move for Japan, SoftBank Corp successfully listed bond-type shares on the Tokyo Stock Exchange, raising an impressive 120 billion yen (approximately $799 million). The shares quickly gained traction among both retail and institutional investors, with trading at 4,035 yen, surpassing the offering price of 4,000 yen.

SoftBank’s CEO, Junichi Miyakawa, disclosed that the funds would be directed toward supporting the company’s medium-term objectives, notably the expansion of “next-generation social infrastructure.” This infrastructure aims to facilitate the development of large language models (LLMs) that are locally developed in Japan.

While the shares are categorized as equity from an accounting perspective, they offer a fixed dividend of 2.5% and can be redeemed by SoftBank after a five-year period. The offering primarily targeted retail investors and garnered substantial interest from both retail and institutional segments.

Although the total demand was not disclosed, the level of interest from retail investors took even SoftBank’s CEO by surprise. Additionally, these publicly listed shares can be conveniently purchased through the tax-efficient NISA (Nippon Individual Savings Account), a feature that differentiates them from corporate bonds.

The joint bookrunners for the listing emphasized that this innovative product encourages the transition from traditional savings to investments, especially given the context of rising interest rates and diminishing attractiveness of conventional bank deposits. This aligns with the Japanese government’s longstanding initiative to motivate households to channel their savings into investments, as a significant portion of household financial assets currently remains in cash or bank deposits.

(Exchange rate: $1 = 150.2500 yen)

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Shahnawaz Alam

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