Rakuten launches $500 million 10¼% two-year senior notes at 96.968 to yield 12%; pricing Tuesday

By Paul A. Harris

Portland, Ore., Nov. 22 – Tokyo-based Rakuten Group, Inc. launched its $500 million offering of two-year senior notes (S&P: BB+) with a 10¼% coupon at 96.968 to yield 12%, according to a syndicate source.

The deal launched in the middle of yield talk in the 12% area.

Structural details also surfaced. The deal has a bullet structure, protected by a make-whole call at Treasuries plus 50 basis points, but otherwise non-callable. There is a 40% equity clawback at 110.25 until Nov. 30, 2023.

Timing was accelerated with the close of books moved up to 11 a.m. ET on Tuesday from the previously announced close of books that had been scheduled at 2 p.m. ET on Tuesday.

The deal is also set to price later on Tuesday.

There has been a significant number of indications of interest across Asia, Europe and the United States, according to the syndicate source.

High-yield accounts in the United States are taking a close look at the Rakuten offering, market sources say.

Sole physical bookrunner Morgan Stanley will bill and deliver. Goldman Sachs, Daiwa, Mizuho, BofA Securities and Citigroup are joint bookrunners.

The e-commerce and online retail services provider plans to use the proceeds for general corporate purposes, including capital investments for its mobile business and/or for debt repayment.

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