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Japan's Softbank to tap US bond market to fund T-Mobile acquisition -report

(Credit: Reuters) This photo shows Softbank Corp President Masayoshi Son speaking during a news conference in Tokyo.Softbank Corp
December 26
4:02 AM 2013

Softbank Corp, the third-biggest mobile carrier in Japan, will most likely tap the US bond market for the acquisition of T-Mobile, the Nikkei business daily reported on Wednesday. The report also said the Japanese firm would need more than $19 billion for the transaction, wrote RTT News.

According to Nikkei, Softbank plans to have Sprint, its US unit, issue bonds. This move will allow the parent company to retain financial power required for mergers and acquisitions, the daily read. Sprint is likely to borrow funds for the deal and then convert that debt through bond issuance, the report detailed.

Sprint is reportedly preparing an acquisition bid worth over $20 billion for T-Mobile in early 2014. Softbank expects to hold a 60% to 70% stake in the company that would be formed after the merger of T-Mobile and Sprint, the report explained.

The report stated that a merger between the third and fourth-biggest US wireless carriers could create an entity big enough to challenge the dominance of Verizon and AT&T Inc in the market. However, this transaction could also face serious scrutiny from US regulators because of antitrust issues, RTT News reported.

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