SoftBank seeks $19b loan

TOKYO - Softbank plans to borrow ¥1.4 trillion ($19.2 billion) in Japan's biggest asset-backed loan to refinance debt used to acquire the local mobile-phone unit of Vodafone, sources say.

Citigroup, Deutsche Bank and Mizuho Financial are leading negotiations to replace a ¥ 1.28 trillion one-year loan with longer-term financing, said three sources who asked not to be identified.

SoftBank had agreed to set aside revenue from phone customers in a separate unit to cover repayment, they said.

The new loans would have different maturities, none longer than 12 years, they said.

Shares in the Tokyo-based company fell 33 per cent since the takeover was announced in March and yields on its five-year bonds doubled this year.

"This is a lot of money so SoftBank needs to get a good deal," said Osamu Kobayashi, a Tokyo-based analyst at Standard & Poor's, which is considering cutting the company's junk BB-credit rating.

"How they convert the short-term borrowing is the key. That will affect creditworthiness down the road."

SoftBank aims to win investment-grade ratings of A and BBB.

The ¥ 1.4 trillion transaction would be more than 10 times larger than any asset-backed loan publicly disclosed in Japan, said Chinatsu Hani, a Tokyo-based analyst covering structured finance at Merrill Lynch.

- BLOOMBERG