Execution of Hybrid Loan Agreement
SoftBank Group Corp. (“SBG”) announced today that it has entered into a hybrid loan agreement for an amount of JPY 135.0 billion (the “Hybrid Loan”), primarily to replace the hybrid loan of JPY 84.0 billion, which is scheduled for its first voluntary prepayment date in November 2024, as follows.
The remaining JPY 51.0 billion will be used in part for the replacement of domestic hybrid notes (with an optional interest payment deferral provision) totaling JPY 177.0 billion, which are scheduled for their first optional redemption date in February 2026.
Summary of the Hybrid Loan agreement
| 1. Borrower | SBG |
|---|---|
| 2. Date of execution | October 31, 2024 |
| 3. Amount of borrowing | JPY 135.0 billion (planned) |
| 4. Date of drawdown | November 8, 2024 (planned) |
| 5. Date of first voluntary prepayment | November 8, 2029 |
| 6. Maturity | November 8, 2059 |
| 7. Collateral | None |
| 8. Guarantee | None |
Although the Hybrid Loan will be recorded as an interest-bearing debt in SBG's consolidated financial statements, it qualifies for 50% equity treatment from a rating agency (Japan Credit Rating Agency, Ltd.) as it provides SBG with the option to defer interest payments, has an extremely long maturity, and its payment priority is subordinated to senior indebtedness.
In the event of prepayment of the Hybrid Loan, SBG intends to replace the loan with financial instruments that qualify for equivalent equity treatment from rating agencies, if SBG deems it necessary after considering its financial condition, the potential impact on credit ratings, and other relevant factors.
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