Rakuten Debt: Kicking the can down the road (II)
As we described in the first installment of this series, at the end of January, Rakuten conducted tender offers to purchase for a combined aggregate purchase price (exclusive of accrued and unpaid interest) of up to $1 billion the two large USD-denominated bonds coming due this calendar year. This transaction did not come free, as Rakuten offered a three percent early termination premium, and the senior notes coming due in 2027 replacing the debt were offered at a higher interest rate.
As Rakuten stated at the time, the company intended to repurchase certain of their JPY denominated senior bonds scheduled to mature in and after 2024 with cash on hand and any remaining proceeds from the Offering. There are JPY 20bn and JPY 10bn instruments coming due at the end of June 2024, as well as a JPY 75bn bond in early December 2024. The “big kahuna” is a JPY 250bn bond maturing in February 2025.
Rakuten announced today that it has indeed completed the purchase and cancellation of certain of its JPY denominated senior bonds, namely the JPY 75bn bond maturing in early December, with a total face value of the purchase of JPY 55.8bn, and JPY 19.2bn remaining outstanding. It used cash on hand and proceeds from the February 2024 issuance of USD denominated senior notes, less the amount used for the February 2024 offers to repurchase USD denominated senior notes due 2024 for cash consideration, as the source of funds for the purchase.
Let’s see what happens to the “big kahuna” over the coming months.
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