SoftBank’s pioneering bond-type stock starts trading in Tokyo

SOFTBANK’S corporate bond-type stock traded on the Tokyo Stock Exchange on Nov 2 at slightly more than the offering price, in the first listing of its type in Japan.

The 120 billion yen (S$1.08 billion) of publicly sold class shares debuted under the issue code “94345”, which is SoftBank’s ticker plus a “5”. The shares were traded at 4,005 yen as at 9.15 am, compared with an offering price of 4,000 yen.

They were mainly sold to individuals who can receive a stable dividend of 2.5 per cent on the class shares, which are redeemable at the issue price if SoftBank calls them after five years. That compares with an average coupon of 0.6 per cent on five-year yen-denominated corporate bonds sold this year, according to data compiled by Bloomberg.

Japanese are seeking ways to build wealth as inflation has jumped to near the highest in more than 40 years, meaning that just parking assets in cash and deposits is no longer enough. The SoftBank securities can be bought and sold anytime on the exchange, and they are also tax-exempt under the new Nisa savings accounts.

The new financing tool is paving the way for other Japanese companies to follow suit, said Toshiyasu Ohashi, chief credit analyst at Daiwa Securities. He noted that the class shares are recognised as capital and do not cause any dilution as they have no voting rights.

Individual investors bought 110 billion yen of shares at the offering last month, while institutions including central public agencies and regional lenders purchased 10 billion yen, according to the joint lead managers. BLOOMBERG