Rakuten starts marketing its third dollar bond offering of 2024

Rakuten Group began marketing its third dollar bond of the year, seeking to take advantage of strong investor appetite for junk rated debt that drove U.S. spreads to their lowest since 2007.

The e-commerce giant is targeting the sale of as much as $550 million of subordinated notes that can be called after five years, with price talk for the deal given at 8.375% area, according to a person with knowledge of the matter. Rakuten is offering debt with a rating of single B from S&P Global Ratings, three levels below its issuer score.

Rakuten is a rare Japanese issuer in the U.S. high-yield market, upon which it has become increasingly reliant for funding after its mobile network business saddled it with a string of losses and lower credit ratings. The company, which priced $3.8 billion of dollar bonds between January and April, said it plans to use the funds from the current offering to redeem yen notes that have call options late next year.