SoftBank : Public Offering of Hybrid Bonds (with a Subordination Provision)

Press Releases 2016

August 24, 2016
SoftBank Group Corp.

SoftBank Group Corp. ('SBG') announces today that it has filed an Amended Shelf Registration Statement to the Kanto Local Finance Bureau in regard to an issuance (the 'Issuance') of publicly offered subordinated hybrid bonds (the 'Hybrid Bonds') for institutional investors and individual investors as follows.

1. Purpose and Background of the Issuance

SBG has decided to issue the Hybrid Bonds where it could expect to obtain a certain degree of equity credit from rating agencies to enhance its financial strength after the acquisition of ARM Holdings plc ('ARM') of the United Kingdom.
As described in 'Recommended Acquisition of ARM by SoftBank ' dated July 18, 2016, SBG reached an agreement with ARM on July 18, 2016 on the terms of a recommended all cash acquisition of the entire issued and to be issued share capital of ARM by SBG, amounting approximately GBP 24.0 billion (approximately JPY 3.3 trillion) by means of a court-sanctioned scheme of arrangement. The scheme is expected to be effective on September 5, 2016 subject to the satisfaction of customary terms including the sanction of the ARM's court meeting and an approval of ARM's general meeting of shareholders, both of which are scheduled on August 30, 2016.

2. Summary of the Issuance

Terms and conditions of the Hybrid Bonds are as follows.

(1) Unsecured subordinated bonds with interest deferrable clause and early redeemable option (with a subordination provision) (mainly for institutional investors)

(2) Unsecured subordinated bond with interest deferrable clause and early redeemable option (with a subordination provision) (mainly for individual investors)

The Hybrid Bonds are recorded as bonds from accounting perspective, however, they allow the issuer an option to defer interest payment and have a longer maturity than senior bonds and loans while their payment priority can be considered as subordinated to senior indebtedness. Under these terms and conditions similar to equity in nature and characteristics, SBG expects the Hybrid Bonds will be eligible for 50% equity treatment from rating agencies (Japan Credit Rating Agency, Ltd. and Standard & Poor's Ratings Japan K.K.).

3. Schedule

SBG has filed today an Amended Shelf Registration Statement to the Kanto Local Finance Bureau in regard to the Issuance. Detailed terms and conditions including pricing are scheduled to be determined on September 9, 2016 subject to market conditions.
The Hybrid Bonds will be the first public placement widely targeted at individual investors by an operating company in Japan.

This press release relates to offerings of Japanese Yen-denominated Bonds (the 'Bonds') that are intended to be directed into Japan and its residents thereof in accordance with the law, customary practices and documentation in Japan. This press release does not constitute an offer of any securities for sale in the United States. The Bonds have not been registered under the United States Securities Act of 1933, as amended (the 'Act'), and may not be offered or sold in the United States absent registration or an application exemption from the registration requirements under the Act.

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