The first-ever bond-type shares of SoftBank Corp. of Japan were offered 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, which is more than the 4,000 yen offering price.
The money, according to SoftBank CEO Junichi Miyakawa, would be used to finance the company’s medium-term goals, which include the construction of “next generation social infrastructure.”
SoftBank aims to enable the creation of Japanese domestic large language models (LLMs) through the use of such infrastructure.
The telecom company announced on Tuesday that it had started using a computing platform in order 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 largely targeted at retail investors.
SoftBank would not reveal the entire amount of demand, but Miyakawa expressed gratitude for the quantity of demand when questioned about retail interest. To be honest, I was taken aback.
Unlike corporate bonds, shares are tradable through the tax-efficient Nippon Individual Savings Account (NISA) because they are publicly listed.
The listing’s joint bookrunners stated that this increased the listing’s appeal to individuals.
According to the joint bookrunners, “this product has helped to promote the shift from savings to investments in the context of rising interest rates and the declining appeal of traditional bank deposits.”
Given that half of all family financial assets are cash or bank deposits, this is in line with long-standing Japanese government policy, which aims to promote the use of home savings for investments.
Earlier, Technology investor SoftBank sent its India portfolio businesses on a two-day AI tour in Silicon Valley to meet with senior officials from AI startups like ChatGPT parent OpenAI, Amazon-backed Anthropic, and others, during a time when the AI (artificial intelligence) arms race is intensifying in the US.
Executives from companies including Cohere, Databricks, MosaicML, and Microsoft Azure AI were also present in the group of roughly twenty portfolio founders and senior executives.
