Rakuten Expands Senior Note Issuance to $1.75 Billion for Strategic Buyback
Rakuten Group, a leading Japanese e-commerce conglomerate (4755.T), has opted to increase the size of its planned dollar-denominated 3-year senior note issuance from the initially proposed $1 billion to a revised amount of $1.75 billion, according to an insider source.
This adjustment aligns with Rakuten’s strategic objective of fully redeeming its 10.25% senior notes and 3.546% senior notes scheduled to mature in 2024, with a combined principal outstanding of precisely $1.75 billion. The company, initially capping its tender offers at $1 billion last Friday, has expanded the scope to include all outstanding Notes of either series, providing a more comprehensive approach to the buyback.
Rakuten grapples with a significant debt redemption challenge, facing a total of 800 billion yen ($5.4 billion) in obligations set for repayment by the end of 2025. This debt accumulation is attributed to the escalating costs incurred in establishing Japan’s fourth mobile network carrier.
To meet its financial commitments, Rakuten has strategically employed various measures. In addition to the planned note issuance, the company has pursued debt refinancing, listed its banking unit, divested assets, and issued new shares to strengthen its financial position.
The forthcoming senior note issuance is expected to carry an interest rate of approximately 12.25%, with final terms set to be confirmed on the morning of January 30, U.S. Eastern time. The source providing this information is not authorized to speak publicly on the matter.
Despite reports of the expanded note issuance, representatives from Rakuten refrained from commenting and reiterated that there was nothing further to add beyond Tuesday’s announcement of the increased buyback offer. Bloomberg was the first to report on the augmentation of the note issuance.
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