Rakuten launches upsized $450 million add-on to 10¼% notes due 2024 at 97.5; pricing Wednesday

By Paul A. Harris

Portland, Ore., Jan. 11 – Tokyo-based Rakuten Group Inc. upsized an add-on to its 10¼% senior notes due Nov. 30, 2024 (S&P: expected BB) to $450 million from $200 million and launched the deal at 97.5, according to market sources.

The launch price comes in the middle of the 97 to 98 price talk and in line with initial guidance that had the deal pricing with 2 points to 3 points of OID to yield 11½% to 12%.

The deal is set to price later on Wednesday.

Sole physical bookrunner Morgan Stanley will bill and deliver. Goldman Sachs, Daiwa, Mizuho, BofA Securities, Citigroup, Credit Suisse and Barclays are the joint bookrunners.

The notes are covered by a make-whole call at Treasuries plus 50 basis points. They feature a 40% equity clawback at 110.25 until Nov. 30, 2023. They also feature a 101% poison put.

The e-commerce and online retail services provider plans to use the proceeds, including incremental proceeds resulting from the $250 million upsize, for general corporate purposes, including capital investments for its mobile business and/or for debt repayment.

The original $500 million issue priced at 96.968 to yield 12% on Nov. 22.

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