KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.
Key Points
SoftBank Group Corp priced a ¥200 billion (US$1.3 billion) hybrid bond with a 4.556% coupon, the highest for a domestically issued yen corporate bond this year.
The 35-year non-call five structure was priced at 340 bps over JGBs, roughly three times the yield of 10-year government bonds.
Proceeds will support funding needs tied to SoftBank’s US$500 billion “Stargate” AI initiative.
The deal size was upsized from an initial ¥100 billion to ¥200 billion amid strong funding requirements.
Rating agencies are expected to classify ~50% of principal as equity, given the bond’s subordinated, deferrable nature.
Market Context
SoftBank has been Japan’s most active corporate issuer this fiscal year, with ¥820 billion in domestic bond sales, surpassing all peers. Elevated supply has pressured spreads higher, with the record coupon reflecting rising borrowing costs.
Strategic Considerations
Hybrid bonds allow SoftBank to raise quasi-equity funding while protecting credit ratings.
By securing funding now, SoftBank locks in capital ahead of potential further rate hikes.
The transaction underlines management’s urgency in financing its Stargate AI strategy, which demands record levels of capital.
Investor Takeaway
SoftBank’s latest issuance highlights:
Attractive yield pickup vs. JGBs (triple the 10Y yield).
Structural subordination risk, with deferrable coupon payments.
Growing reliance on domestic markets to finance ambitious AI investments.
While the higher coupon reflects market concerns on leverage and supply, the bond’s hybrid classification offers SoftBank equity credit—a key buffer as it continues to pursue aggressive capital expenditure.
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