Rakuten Group Inc. (RKUNY, Financial) is once again making its mark in the high-yield bond market with a new offering valued at $1.25 billion, following the success of its debt issued earlier in the year.
The initiative aims to utilize the proceeds from the five-year bonds to buy back debt that is maturing later this year. Sources familiar with the matter, who preferred to remain anonymous, indicated that the initial yield discussions are targeting the mid-10% range.
Despite attempts to reach out, both Rakuten and Goldman Sachs Group Inc. (GS, Financial), the lead underwriter for the transaction, have not provided any comments on the matter.
An investor call was organized at 11 a.m. New York time, with expectations set for the notes to be priced within the week.
This move comes on the heels of Rakuten's January bond issuance, which raised $1.8 billion at a yield of 12.125%, setting a new record for a Japanese company issuing debt in U.S. dollars. Since then, the value of this debt has increased to 106 cents on the dollar, showcasing a strong market performance.
Rakuten has been actively seeking financial avenues this year to alleviate its hefty debt load. Market signals from the credit sector have been indicating a relatively high risk of repayment from the company, among the highest for Japanese entities.
