Softbank Corp. (9984), the Japanese telecommunications company vying with Dish Network Corp. to acquire Sprint Nextel Corp. (S:US), is preparing to sell $2 billion of bonds in the U.S. and Europe.
The company may sell seven-year notes denominated in dollars and euros this week, according to a person familiar with the transaction. The bonds may yield 4.5 percent to 4.75 percent.
Softbank began marketing the debt last week with part of the proceeds intended to be used for the Sprint deal, said the person, who asked not to be identified because terms aren’t set. The sale is not contingent on the deal’s closing.
Should the acquisition fail to close, “there’s a lot of potential uses” for the proceeds, Sajod Moradi, a Philadelphia- based credit analyst at Delaware Investments, said in a telephone interview. “They’re a pretty solid company and they’ll find a good use for that cash.”
Billionaire Masayoshi Son’s Softbank offered in October to buy a 70 percent stake in Sprint Nextel to enter the U.S. market and create the world’s third-biggest mobile-phone services provider. Dish made an unsolicited $25.5 billion cash-and-stock offer for Sprint Nextel on April 15.
The bonds have been rated a provisional Baa3, the lowest level of investment grade, by Moody’s Investors Service, the ratings company said in a April 9 statement. The bonds may be graded BB+, the highest speculative level, by Standard & Poor’s, the person said.
“There’s still a lot of demand for paper on higher-rated, quality companies out there,” Moradi said. “This is an opportunity for them to diversify their investor base a little bit.”
Deutsche Bank AG is serving as global coordinator for the offering, the person said.
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