SoftBank Raises $800 Million from Bond Listing

Japan’s SoftBank Corp’s bond shares listed on the Tokyo Stock Exchange on Nov 2 in Japan's first such listing, raising a total of 120 billion yen ($799 million) amid strong demand from retail and institutional investors.

Shares were trading at JPY 4,035 at 0359 GMT, above the offer price of JPY 4,000. SoftBank CEO Junichi Miyakawa said the money will be used to finance medium-term plans, including building next-generation social infrastructure. With such an infrastructure, SoftBank hopes to facilitate the development of Japan's domestic large language models (LLM).

On October 31, the telecommunications company announced that it has started operating a computing platform that plans to develop an LLM in 2024. Although classified as equity on the books, the shares offer a fixed 2.5 percent dividend and can be redeemed by SoftBank after five years. The offering was primarily aimed at retail investors, and demand appears to have been strong among both retail and institutional investors. While SoftBank did not disclose total demand, when asked about retail interest, Miyakawa said he was grateful for the level of demand. "Frankly, I was surprised."

As the shares are publicly listed, they can be purchased through the tax-efficient Nippon Individual Savings Account (NISA), unlike corporate bonds. Joint bookrunners for the listing said this raised the appeal for individuals.

"This product has played a role in promoting the transition from savings to investment in the context of rising interest rates and the diminishing appeal of traditional bank deposits," the joint book-runners said.

This dovetails with Japanese government policy, which has long sought to encourage the use of household savings for investment, as half of household financial assets are in cash or bank deposits.