Rakuten Prices $1.9 Billion of Local Bonds in Liquidity Boost

Japanese e-commerce giant Rakuten Group Inc. priced 250 billion yen ($1.9 billion) of bonds on Friday, giving the company an important injection of liquidity after it was cut further into junk by S&P Global Ratings last month.

(Bloomberg) — Japanese e-commerce giant Rakuten Group Inc. priced 250 billion yen ($1.9 billion) of bonds on Friday, giving the company an important injection of liquidity after it was cut further into junk by S&P Global Ratings last month.

Rakuten sold the two-year notes targeted at individual investors at a yield of 3.3%, according to a company filing. It follows the sale earlier this month of a $450 million dollar-denominated bond at a yield of close to 12%.

The company is shoring up cash after racking up billions of dollars of losses over the past two years due to expenditures at its mobile carrier business that is seeking to take on dominant players NTT Docomo Inc., SoftBank Corp. and KDDI Corp. Late last year, S&P cut Rakuten’s credit rating to BB from BB+, citing slow improvement in Rakuten’s mobile business and its detrimental impact on the company’s cash flow.

Rakuten is also seeking to generate cash from the sale of stakes in its banking and securities units. It has been preparing to list its banking unit in an IPO. Mizuho Financial Group Inc. agreed to buy a minority stake in Rakuten’s online securities arm for 80 billion yen in October.

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