* SoftBank trumps own record with record $20 bln equivalent
* Refinances $17 bilion bridge loan from Sprint acquisition
* Japanese and international banks keen to lend
(Adds further loan details, background and context)
By Jacqueline Poh
HONG KONG, Aug 8 Japanese wireless carrier
SoftBank Corp is raising a jumbo $20 billion
yen-equivalent loan, which is the biggest ever syndicated loan
to be raised in the Asia Pacific region, banking sources said on
Proceeds will refinance the one-year bridge loan from
December 2012 that backed SoftBank's $21.6 billion acquisition
of US-based telecom Sprint Corp, which is the biggest
overseas acquisition by a Japanese company.
The original bridge loan, which totalled 1.65 trillion yen
($17.08 billion), was previously Asia's largest syndicated loan.
It was subsequently reduced to 1.285 trillion yen after SoftBank
raised a 370 billion yen bond to cover its investment in Sprint.
Bank of Tokyo-Mitsubishi UFJ, Deutsche Bank, Mizuho
Corporate Bank and Sumitomo Mitsui Banking Corp are arranging
the new jumbo loan and also led the original bridge loan.
The deal has been launched to a wider syndication and banks
have been invited to join with minimum commitments of $500
million in yen.
SoftBank declined to comment.
The jumbo loan consists of a five-year tranche and a
seven-year tranche and has amortising repayments throughout the
life of the loan.
Pricing is based on a ratings grid and is less than 150
basis points (bps), sources said. SoftBank was recently
downgraded to Ba1 and BB+ by Moody's Investors Service and
Standard & Poor's.
The downgrades followed SoftBank's acquisition of Sprint
which "will significantly weaken SoftBank's financial
flexibility," Moody's said in a report in July.
The ratings agency also said that SoftBank will have to
extend additional finance to help Sprint execute its large
capital expenditure program of $16 billion for 2013 and 2014.
Although the loan is unsecured and SoftBank has a
non-investment grade credit rating, many Japanese and
international banks are still keen to join the deal.
Japanese lenders view SoftBank as an A-rated credit,
reflecting the views of domestic credit ratings agencies. Liquid
Japanese banks are also cash-rich, particularly in yen, and
eager to lend.
The deal is expected to be supported mainly by Japanese
banks due to the relatively low margin for a non-investment
Foreign banks are also keen to lend due to the lack of
internationally-syndicated deals from Japan and SoftBank's
strong financial performance.
SoftBank is on track for a record annual profit and is
projecting consolidated operating income of at least 1 trillion
yen in the fiscal year ending March 31, 2014, according to its
financial report on July 30.
Moody's July report also said that SoftBank has improved its
financial metrics in the last two years, especially its ability
to generate higher EBITDA on the back of stronger revenue growth
and a steady improvement in its operating margin despite
SoftBank started talking to lenders in February about
refinancing the bridge loan. Banks have until the end of August
to commit to the new loan.
On Tuesday, SoftBank said it has bought an additional 0.73
percent of Sprint's common stock, increasing its stake in the US
wireless operator to 79.07 percent.
Sprint's shares have risen more than 20 percent since early
July when the acquisition was completed.
In 2011, SoftBank raised a self-arranged 550 billion yen
term loan, which matures in March 2015, to refinance a 1.45
trillion yen whole business securitisation deal that the company
put in place to finance its leveraged buyout of Vodafone Group
Plc's Japanese subsidiary, Vodafone KK.
That deal paid a margin of 90bps over Tibor based on the
company's BBB- rating at that time.
($1 = 96.5850 Japanese yen)
(Editing by Tessa Walsh)