The Tokyo Stock Exchange said Softbank Corp intended to ink a JPY 1.98 trillion or USD 20 billion loan agreement with 19 banks tomorrow. The loan would be used by the bank to refinance the debt it amassed when it bought Sprint Corp. Softbank bought Sprint in July for USD 21.6 billion.

Sources told Bloomberg that the loan would help Softbank to reduce its borrowing costs. On the five-year portion of the debt, Softbank would be paying a margin of 110 basis points higher than the one-month Tokyo interbank offered rate. Meanwhile, the bank would pay 140 basis points higher than the said rate for the seven-year portion of the loan.

Bloomberg reported that the move to reduce borrowing costs could help put Softbank's investors at ease that the acquisition of the third largest wireless company in the US would put its finances on shaky ground. In July, credit rating agencies Moody's Investors Service and Standard & Poor's downgraded Softbank's rating to non-investment grade because of its acquisition of Sprint.