Softbank’s $4.5 billion equivalent bonds ease in Asian trading; all tranches trade below reoffer

By Paul A. Harris and Christine Van Dusen

Portland, Ore., July 23 – The bonds in all five tranches of Softbank Group Corp.’s $4.5 billion equivalent of new senior bullet notes (Ba1/BB+) were down ¼ point to ½ point from Wednesday’s New York close in Asian trading on Thursday, according to a trader.

Trading was very active, according to the source.

The dollar-denominated 5 3/8% notes due 2022 traded in a range of 99¼ to 99¾, with fast money cutting and/or setting up shorts while the notes enjoyed great demand from Asian private banks. The 5 3/8% notes due 2022 were trading at 99 3/8 bid, 99 5/8 offered into the London open, the trader said. The notes priced at par in a $1 billion tranche on Wednesday.

The dollar-denominated 6% notes due 2025 were 99 7/8 bid at the Asian open, then faded to 99¾ bid, and were seen as low as 99¼ bid. Trading was very heavy with fast money selling on the way down. Private bank demand was decent but not enough to support the bonds, the trader said, adding that the 6% notes bounced back a bit into the London open, last seen at 99 1/8 bid, 99 3/8 offered. The 6% notes priced at par in a $1 billion tranche.

The euro-denominated 4% notes due 2022 started the Asian session at par ¼ bid, par ¾ offered, but flippers soon sold the euro paper after the dollar-denominated tranches faltered, the trader said. The 4% notes due 2022, which came Wednesday in a €500 million tranche, were last seen at 99½ bid, par offered, the Asian trader said.

The euro-denominated 4¾% notes due 2025 were quiet, with modest retail demand, the source said. The 4¾% notes came in a €1.25 billion tranche that priced at par.

Finally, the euro-denominated 5¼% notes due 2027 traded in the context of 99½ bid, par offered, with private bank demand, and were last seen at 99 3/8 bid, 99 7/8 offered in Asian trading.

Regulation S only

The Tokyo-based telecommunications company brought all of the bonds – even the dollar-denominated tranches – in a Regulation S only transaction, according to market sources.

Thus there did not appear to be a lot of activity in the name among investors in the United States on Thursday, according to a New York-based trader, who added that a significant number of U.S. accounts are constrained from owning the deal because of its Regulation S only format.

Deutsche Bank was a global coordinator and the physical bookrunner for the massive Wednesday deal. Goldman Sachs International was also a global coordinator.

Softbank sold the bonds to raise money for general corporate purposes and to refinance debt.

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