TOKYO -- Japanese telecom company KDDI is preparing to issue up to 90 billion yen ($797 million) in medium- to long-term bonds to raise funds for investments like building a 5G network.
This will likely mark one of KDDI's biggest bond sales. The coupon rate and other terms will be set in November.
KDDI, known for its au mobile phone brand, plans to use the money raised for capital spending and debt repayment. With global interest rates on the rise, the company is taking advantage of a low-cost fundraising opportunity while it still can.
KDDI is in the midst of investing 500 billion yen over three years in areas beyond its mainstay domestic wireless business, which faces low growth prospects and will see more competition when e-commerce group Rakuten enters the market next year.
The telecom recently bought the operator of KidZania learning centers in Japan. Earlier this year, it acquired Tokyo-based English conversation school owner Aeon.
In its core business, KDDI is preparing for the start of ultrafast 5G wireless service in Japan in the next one to two years.
The upcoming bond sale is likely to consist of debt maturing in five to 10 years. Daiwa Securities, Mizuho Securities, Mitsubishi UFJ Morgan Stanley Securities and Nomura Securities have been named as lead managers on the offering.