SoftBank: corporate derivatives behemoth

摘要

SoftBank has become one of the biggest corporate payers of investment banking fees, splurging nearly US$400m across loans, bonds, equities and M&A in the first nine months of 2021 alone, according to Refinitivdata. It's perhaps not surprising then that the Japanese conglomerate is also one of the most prominent users of corporate equity derivatives, providing another enormous source of revenue to its banks. Goldman Sachs and JP Morgan were among the banks that made hundreds of millions of dollars in revenues between them for arranging a series of deals that helped SoftBank raise US$13.7bn against its stake in Chinese internet giant Alibaba last year, while also reducing its holdings in T-Mobile US in a separate set of transactions. SoftBank-linked activity has continued to provide opportunities in 2021. Last month, Deutsche Telekom and SoftBank announced a share swap deal that would allow the German telecoms outfit to increase its stake in T-Mobile US. SoftBank would also become Deutsche Telekom's second largest private shareholder under the deal. Earlier this year, SoftBank borrowed US$1.9bn against its Alibaba shares through a margin loan and raised a further US$3bn through so-called pre-paid forward contracts - a derivatives structure whereby it commits to selling Alibaba shares in the future.