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Finance

Japan's Rakuten to raise Y30B via bond issue

TOKYO -- Japanese online retail giant Rakuten will soon issue 30 billion yen ($290 million) worth of straight bonds to meet its growing financing needs, people familiar with the matter said Saturday.

     It will be Rakuten's first public offering of straight bonds. The move comes amid low interest rates, which have pushed down corporate borrowing costs.

     The three-year bonds will carry an interest rate of around 0.4% and target institutional and retail investors.

     Of the total amount, 20 billion yen worth of the bonds will be dubbed "Tohoku Rakuten Golden Eagles bonds" and sold to retail investors. The Tohoku Rakuten Golden Eagles are a professional baseball team owned by Rakuten.

     The company plans to use the proceeds to help finance a spate of acquisitions and the construction of new logistics facilities. In March, Rakuten acquired Cyprus-based free smartphone chat app provider Viber Media for about 93.5 billion yen.

     Money from the sales will be used to repay short-term loans, invest in capital expenditures and promote the company's Rakuten Ichiba online shopping mall.

     Most of Rakuten's funding needs have been met through bank loans. It decided to publicly issue straight bonds to diversify its financing methods, capitalizing on the name recognition it has achieved through owning the baseball team.

(Nikkei)

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