The first-ever bond-type shares of Japan’s SoftBank Corp. (9434.T) were launched on the Tokyo Stock Exchange on Thursday, garnering a total of 120 billion yen ($799 million) due to significant demand from both retail and institutional investors.
The shares were trading at 4,035 yen as of 03:59 GMT, more than the 4,000 yen offering price.
According to SoftBank CEO Junichi Miyakawa, the funds would be utilized to finance the company’s medium-term goals, which include constructing “next-generation social infrastructure.” SoftBank aims to enable the creation of Japanese domestic large language models (LLMs) through such infrastructure.
The telecom company announced on Tuesday that it has started using a computer platform to work on developing an LLM by 2024.
The shares, which have an annual fixed dividend of 2.5% and are redeemable by SoftBank after five years, are technically considered equity under accounting principles. Demand seems to have been high among institutional and retail investors alike, with the offering primarily targeted at individual investors.
SoftBank would not reveal the entire amount of demand, but Miyakawa expressed gratitude for the quantity of market when questioned about retail interest. “Frankly, I was surprised.”
Unlike corporate bonds, shares are tradable through the tax-efficient Nippon Individual Savings Account (NISA) since they are publicly listed.
The listing’s joint bookrunners stated that this increased the listing’s appeal to individuals. “This product has played a role in promoting the transition from savings to investment in the context of rising interest rates and the diminishing appeal of traditional bank deposits,” the two joint book-runners stated.
Given that half of all family financial assets are cash or bank deposits, this aligns with long-standing Japanese government policy, which aims to promote home savings for investments.
