Sony plans its first dollar-bond sale in nearly three decades

SONY Group was still marketing the original PlayStation when it last tapped the US investment-grade bond market. Almost three decades later, it’s readying a comeback.

The company mandated Bank of America and Morgan Stanley to hold calls with debt investors that started on Monday (Jun 22), according to a source with direct knowledge of the matter.

A two-tranche note offering with maturities of five and 10 years is expected to follow, the source added, asking not to be identified disclosing private information.

The offering, which Sony said in a Securities and Exchange Commission filing will raise cash for general corporate purposes, is part of a rush of high-grade bond sales in the US. Companies have moved to lock in historically tight credit spreads while expectations grow that the US Federal Reserve may begin to raise interest rates.

Among other firms poised to tap the market this week is SpaceX, which is expected to raise at least US$20 billion to repay some debt.

Sony Group last sold bonds in US dollars in 1998, when it raised US$1.5 billion, according to data compiled by Bloomberg. A former US unit of the Tokyo-based firm tapped the market in 2001.

Selling US dollar-denominated debt is a more attractive option for Japanese companies now that policy tightening by the Bank of Japan has put its benchmark interest rate at the highest level since 1995.

Firms have been selling record amount of euro-denominated notes amid funding-diversification efforts as rate differentials have narrowed.

Auto-parts maker Denso on Monday sold a US$500 million investment-grade US dollar note, after conglomerate Mitsubishi raised US$1 billion earlier this month. In the eurobond market, Toyota Motor priced one billion euros (S$1.5 billion) of debt on Monday.

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Sony last year spun off its insurance and banking firm to focus on its entertainment business, which includes everything from games to music and films. S&P Global Ratings in March upgraded Sony to A+, four notches below AAA, citing an outlook for strong earnings and cash flows.

The company’s new bonds are expected to be rated A2 by Moody’s Ratings and A+ by S&P, the source said. BLOOMBERG