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Bonds

Rakuten braves 10%-plus borrowing cost in new $500m bond sale

Junk note issuance tests group's resolve on loss-making mobile business

Billionaire Hiroshi Mikitani's Rakuten e-commerce group is raising more money to expand its wireless business. (Photo by Mizuho Miyazaki)

TOKYO -- Rakuten Group has set a coupon rate of 10.25% for its upcoming $500 million bond issuance, as the e-commerce company doubles down on its bid to disrupt Japan's wireless communications market despite surging borrowing costs.

After discounts, the two-year unsecured notes will carry a yield of 12%. The issuance was rated BB+ by S&P Global on Nov. 16, placing it in the category of speculative, or junk, bonds.

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