Refinance of Acquisition Finance of Sprint and Arm
SoftBank Group Corp. (“SBG”) announces that today it entered into a senior loan agreement for an amount of JPY 2.65 trillion mainly to refinance the acquisition loan for Sprint Corporation (“Sprint”) in the U.S. and other financings which were executed in September 2013, and the bridge loan for the acquisition of Arm Holdings plc (“Arm”) which was executed in July 2016. SBG also entered into a hybrid loan (the “Hybrid Loan”) agreement for an amount of JPY 84 billion as follows.
Summary of Loan Agreement
| Senior Loan | Hybrid Loan | |
|---|---|---|
| 1. Borrower | SoftBank Group Corp. | |
| 2. Mandated Lead Arranger (MLA) |
| Mizuho Bank, Ltd. |
| 3. Date of Execution | November 2, 2017 | |
| 4. Maximum amount of borrowing | JPY 2,650 billion | JPY 84 billion |
| 5. Date of loan drawdown | November 8, 2017 | |
| 6. Main use of proceeds |
| General corporate purposes |
| 7. Maturity | September 30, 2024 | November 8, 2044 |
| 8. Collateral | None | |
| 9. Guarantee | SoftBank Corp. | None |
The Hybrid Loan is eligible for 50% equity treatment from rating agencies (Japan Credit Rating Agency, Ltd. and Standard & Poor's Financial Services LLC.). It allows SBG an option to defer interest payments and has a longer maturity than senior bonds and loans while its payment priority can be considered as subordinated to senior indebtedness although it will be recorded as a borrowing in SBG's consolidated financial statements.
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