Corporate Debt Restructuring Masterclass

18 July 2022 (Mon), 5pm Singapore/HK time

SoftBank Group (SBG) announced the results of its tender offer announcing that it bought back $2bn equivalent of EUR and USD bonds under a tender offer. The pricing was done through a modified Dutch auction. All tranches in the USD offer were priced at the minimum purchase price stated during the consent solicitation and tender offer announcement two weeks back except for the USD 4.75% 2024s, which was priced at 108.625, above the floor price of 108.375. Similarly all EUR tranches were priced at the minimum purchase price except the EUR 4% 2023s, which was priced at 106.625, above the floor price of 105.625. SoftBank decided not to buyback any of its USD 6.25% 2028s, EUR 5.25% 2027s, EUR 5% 2028s, or EUR 4% 2029s.

They also won approval from bondholders to amend certain terms in the notes, related to a covenant focusing on the distributions of proceeds from asset sales, including removing an existing carve-out for sales of assets in the SoftBank Vision Fund. It will pay $10 per $1,000 or €1 per €1,000 in principal to bondholders who agreed to the changes under the consent solicitation.

Separately, Moody’s changed the outlook on SoftBank to stable from negative while affirming their Ba3 ratings citing the progress of the group’s asset monetization program since March 2020. They noted that the outlook “reflects Moody’s expectation that SBG’s portfolio value is not deteriorating but changing, with its market value-based leverage (MVL) expected to range between 23% and 29%, and that the company will maintain good liquidity with its substantial cash balance.” SoftBank on the other hand issued a statement on Moody’s rating stating “SBG has not obtained a credit rating from Moody’s. SBG has provided no information to Moody’s since we withdrew our request for a rating from the company on March 25, 2020, hence their opinion is based on their subjective assumptions and hypotheses with no reasonable basis for support…SBG’s credit is only rated by S&P Global Ratings (S&P) and Japan Credit Rating Agency, Ltd. (JCR).”

SoftBank’s bonds were stable – their USD 6% Perps were at 100.31, yielding 5.85%

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