Rakuten Plans Return to Dollar Bond Market With Hybrid Notes

Bloomberg2024-12-02

(Bloomberg) -- Rakuten Group Inc. hired banks for a $500 million bond sale at a time when high-yield dollar note funding costs are near 17-year lows. The Japanese e-commerce firm is considering the ...

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Rakuten is turning to the dollar bond market for the third time this year after pricing a combined $3.8 billion of such debt in the first half, according to data compiled by Bloomberg. Rakuten’s planned dollar bond sale follows its bond offering in the currency in April, the data showed.Rakuten, which is rated a sub-investment BB by S&P Global Ratings, is planning a note when high-yield debt funding costs are at near the lowest level since 2007, according to a Bloomberg US high-yield corporate index. The Japanese issuer debuted its first offering in the dollar market in 2019 when it still had the lowest investment-grade score of BBB- from S&P.The proposed bond may price later this week, ac","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"乐天计划通过混合票据重返美元债券市场","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"US10Y.BOND":1,"US12M.BOND":1,"US2Y.BOND":1,"US30Y.BOND":1,"US3Y.BOND":1,"US5Y.BOND":1,"US6M.BOND":1,"US7Y.BOND":1,"RKUNF":0.9,"RKUNY":0.9},"content_text":"(Bloomberg) -- Rakuten Group Inc. hired banks for a $500 million bond sale at a time when high-yield dollar note funding costs are near 17-year lows.\nThe Japanese e-commerce firm is considering the sale of hybrid perpetual notes that can be called after five years, according to a person familiar with the matter. Rakuten is turning to the dollar bond market for the third time this year after pricing a combined $3.8 billion of such debt in the first half, according to data compiled by Bloomberg. Rakuten’s planned dollar bond sale follows its bond offering in the currency in April, the data showed.\nRakuten, which is rated a sub-investment BB by S&P Global Ratings, is planning a note when high-yield debt funding costs are at near the lowest level since 2007, according to a Bloomberg US high-yield corporate index. The Japanese issuer debuted its first offering in the dollar market in 2019 when it still had the lowest investment-grade score of BBB- from S&P.\nThe proposed bond may price later this week, according to a person familiar with the matter.\nThe company’s $1.8 billion high-yield bond climbed to about 109 cents on the dollar on Monday from an issue price of 97.83 cents in January as the company has sold assets to boost liquidity and losses at its mobile carrier operations have narrowed.\nUS Treasury yields are falling on expectations that the Federal Reserve may cut rates further, while the Bank of Japan is shifting to tighter monetary policy, which contrasts with the broad shift to lower rates by other major economies.\nRakuten is planning to use the funds raised for the first call on domestic subordinated bonds, a spokesperson said, adding that it decided to issue dollar-denominated bonds this time because the market environment overseas is good.\nMarkets are focused on whether Rakuten can make bond repayments after an ill-timed foray into Japan’s capital-intensive wireless market. Rakuten reported its 17th straight quarterly net loss in the September period, and said last month it would book a one-time gain of ¥159.4 billion ($1.1 billion) in the current quarter from selling about 15% stake in its lucrative credit card arm to Mizuho Financial Group Inc.\n“Overseas investors in the high-yield bond market tend to think in terms of prices rather than credit ratings,” said Shunsuke Oshida, head of credit research at Manulife Investment Management Japan. “Generally speaking, issuers which can sell high-yield bonds there have gained the trust from the overseas high-yield market.”\nThe online mall operator has ¥400 billion of notes due in the first half of next year but no dollar bonds of the company mature next year, according to data compiled by Bloomberg. If the company proceeds with the mandated bond sale this year it would mark a record annual fund-raising and number of deals for the firm in the US market, according to data combined by Bloomberg.\nRakuten Group might need to offer a large new issue premium for its planned $500 million perpetual notes, as the firm’s net debt-to-Ebitda, ex-fintech remains above 10 times, Bloomberg Intelligence analyst Sharon Chen said in a report.\nRakuten’s liquidity has improved but an increased reliance on the dollar bond market may indicate weakened domestic funding access, the report said.\nEarlier story: Rakuten’s Costly Junk Bonds Signal Challenge Ahead for Mikitani\n(Adds more background, analyst comment)\n©2024 Bloomberg L.P.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.30.0","shortVersion":"4.30.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2488995083"}