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JAPANESE technology firm Rakuten Group is returning to the high-yield bond market with a US$1.25 billion offering after a strong rally in debt it sold earlier this year.
The company is using proceeds from the sale of five-year bonds to repurchase debt due later this year and later, according to a source with knowledge of the matter who asked not to be identified because the deal is private. Early pricing discussions are for a yield in the mid-10 per cent area, sources with knowledge of the matter said.
Representatives for Rakuten and Goldman Sachs Group, which is leading the deal, did not respond to requests for comment.
A call for investors was held at 11 am New York time and the notes are expected to price later this week, the sources said.
Rakuten’s latest deal follows a US$1.8 billion bond offering in January which yielded 12.125 per cent, a record high yield for a Japanese firm issuing in US dollars, Bloomberg previously reported. Since then, the debt has rallied to 106 cents on the US dollar, according to Trace.
The debt-laden company has been tapping financial markets this year to raise fresh funds to pay down its obligations. Credit markets have been signalling some of the highest repayment risk in Japan for the company, according to Bloomberg-compiled data. BLOOMBERG
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