Telecom conglomerate Softbank plans to raise a total of 1.45 trillion yen ($12.3 billion) by securitizing its Vodafone K.K. mobile phone business, Softbank officials said.
Issuing bonds backed by profits from the mobile phone business to several financial institutions, Softbank will raise the money to refinance 1.28 trillion yen in one-year loans it borrowed in April for the acquisition of Vodafone K.K. from Britain's Vodafone Group, the officials said.
Softbank is expected to make a basic decision on the securitization within this month for issuance in late October, with Mizuho Corporate Bank, Citigroup and others serving as lead managers, they said.
Real estate securitization, such as bonds backed by leasing income, is common in Japan , but the securitization of a business itself is unusual. The amount of funds to be raised by Softbank is also unprecedented.
Earnings at Softbank's mobile business are seen as more stable than its other operations.
The planned securitization is expected to enable Softbank to borrow funds at lower interest rates as the bonds backed by profits from the mobile phone business would be deemed more creditworthy than the company's conventional fundraising tools.