SoftBank Group Corp’s (OTC: SFTBY) talks with Japan’s top three banks to secure $3 billion to help fund its support of a real estate startup WeWork have stalled, according to Reuters.
Japan’s three biggest banks are considering the credit risks involved with a $3 billion loan that SoftBank is seeking from the banks to help fund WeWork.
The three banks, Mizuho Financial Group Inc, Mitsubishi UFJ Financial Group Inc (OTC: MBFJF) and Sumitomo Mitsui Financial Group Inc (OTC: SMFG), are looking for secure ways to provide the financing for Softbank, anonymous sources told Reuters.
“SoftBank is an important client so we want to do everything we can to help, but we have to consider our credit risk,” said a senior banker.
Why It Matters
SoftBank Group’s debt burden worsened in recent months. The company had debts worth $140 billion and a poor credit rating, the Wall Street Journal reported in June 2019.
The package included a $3 billion tender offer to buy privately-held WeWork shares, an early payment of $1.5 billion from SoftBank, and around $5 billion in new debt financing.
The $1.75 billion credit line is the first installment of SoftBank’s $9.5 billion bailout package for WeWork.