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SoftBank's Record Bond Sale Strains Japan's Debt Market Capacity
SoftBank Group's recent record-setting JPY 1 trillion bond offering in Japan's domestic market has highlighted potential capacity constraints. Despite strong demand from retail investors, the sheer size of the issue, combined with other large…
SoftBank Group completed a JPY 1 trillion bond issuance on September 16, 2026, marking the largest domestic corporate bond offering in Japan. This sale, equivalent to approximately USD 6.43 billion, exceeded the prior record of JPY 500 billion set by NTT in 2024. The scale of this issuance suggests the Japanese debt market is nearing its capacity for absorbing large corporate bonds, even with substantial interest from retail investors.
Retail buyers accounted for nearly 80% of the JPY 1 trillion issue. The offering was split into two tranches: JPY 600 billion with a five-year maturity and JPY 400 billion with a seven-year maturity. Interest rates were set at 1.83% for the five-year bonds and 2.22% for the seven-year bonds. Despite high demand, the yield offered was notably higher than the 1.6% coupon on SoftBank's previous JPY 350 billion issue from July 2026, suggesting that the market required a premium for the increased size.
The current environment, characterized by the Bank of Japan's gradual shift away from ultra-loose monetary policy, means Japanese corporations face higher borrowing costs. The substantial size of SoftBank's issuance, alongside a JPY 500 billion bond from Tokyo Electric Power Company Holdings and other offerings, indicates growing strain on the market's capacity. This trend could elevate funding costs for other large-scale corporate debt issuances in Japan.
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