SoftBank is seeking to offload a quarter of its $2.2 billion rescue debt provided to WeWork over a year ago.
According to reports, the Japanese conglomerate wants to sell the bonds at around 85.6 cents on the dollar. The bonds will be split into two series, where SoftBank will retain a $1.65 billion portion.
“SoftBank selling in the mid-80s is not exactly a vote of confidence,” said Bill Zox, a high-yield bond portfolio manager at Brandywine Global Investment Management.
WeWork’s notes due May of 2025 fell to 94 cents on the dollar, which is its lowest level since March. Now, their yields exceed the securities that SoftBank plans to sell and are above the 7.2% in average bonds within the same ratings tier.
However, a spokesperson for SoftBank says the sale shows faith in the coworking company and cited WeWork’s performance during October and November. The spokesperson added that the sale “is consistent with ongoing efforts to diversify WeWork’s investor base.”
