Sony Corp. (6758) plans to raise 55 billion yen ($677 million) in a bond sale this week, 83 percent more than the initial target for the company’s first offering since 2009, according to a person familiar with the matter.
The Tokyo-based electronics maker will sell the securities on March 7, the person with direct knowledge of the issue said today, asking not to be identified because the information is private. The company earlier today had targeted about 50 billion yen for the sale, an increase from its initial plan of about 30 billion yen, the person said.
Sony’s credit ratings were cut by Standard & Poor’s, Moody’s Investors Service and Fitch Ratings from December because of concerns it will face difficulties recovering earnings. The maker of Bravia televisions and PlayStation game players more than doubled its full-year loss forecast to 220 billion yen last month, citing a stronger currency, production setbacks and the cost of exiting a display venture.
The company told investors it plans to offer 45 billion yen of five-year notes priced to yield 36 basis points more than government debt, the person said. Sony also plans to sell 10 billion yen of 10-year debt at a spread of 43 basis points more than the benchmark government debt, the person said.
Sony plans to issue bonds by the end of this month, Shinji Obana, a Tokyo-based company spokesman, said in an e-mail today, declining to comment on details such as the notes’ pricing date and amount. The company plans to use the proceeds to repay 60 billion yen of notes due June, Obana said.
The offering would be Sony’s first since June 2009, according to data compiled by Bloomberg. At that time, Sony raised 220 billion yen, including 110 billion yen of five-year 1.298 percent notes at a spread of 42 basis points, the data show.
S&P cut Sony’s long-term ratings last month to BBB+, its third-lowest investment-grade, from A-. Moody’s reduced the rating to Baa1, also its third-lowest investment grade. Fitch rates the company BBB-, one level above junk.
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