Type to search

S&P Cuts SoftBank Rating Deeper Into Junk Over Alibaba Sale

S&P said a listing for chip designer Arm, which has become a primary preoccupation for the group’s chief Masayoshi Son, would improve asset liquidity

A journalist raises her hand to ask a question to Japan's SoftBank Group Corp Chief Executive Masayoshi Son during a news conference in Tokyo, Japan
Recent activity by SoftBank includes its creation of a joint venture to build automated warehouses and investment in insurance tech company Tractable. Photo: Reuters


S&P Global Ratings cut SoftBank Group’s long-term rating deeper into junk territory on Tuesday, citing its exposure to unlisted companies that are susceptible to changes in the external environment.

The move came after SoftBank sold down assets including its stake in Chinese e-commerce giant Alibaba Group to stabilise its balance sheet as the value of its portfolio falters.

“[The sale of its shares] have eroded the proportion of listed assets in its portfolio,” S&P said in a note, lowering SoftBank’s rating to BB from BB-plus.


Also on AF: Risk Warnings as China Money Floods Into Japan-Focused Funds


“Furthermore, the technology stocks in which the company has primarily invested have been depressed for a prolonged period,” the note added.

SoftBank CEO Masayoshi Son has pledged to play “defence” with prudent financial management amid weakness in tech valuations.

“It is extremely regrettable that our financial soundness was not properly assessed, and we will continue our dialogue with S&P,” SoftBank said in a statement.

S&P said a listing for chip designer Arm, which has become a primary preoccupation for Son, would improve asset liquidity.

“We have strongly urged S&P to consider an upgrade once the proposed initial public offering of Arm is completed,” SoftBank said.

SoftBank previously fell out with Moody’s Investors Service over its assessment of the conglomerate and in 2020 took the unusual step of asking the agency to withdraw its ratings.


  • Reuters, with additional editing by Vishakha Saxena


Also read:

Alibaba Shares Sink After Report SoftBank Will Slash its Stake

SoftBank’s Arm Hoping to Raise $8 Billion From Mega US IPO

SoftBank to List Arm in New York, Despite British Appeals

SoftBank’s Chip Tech Firm Arm China Sees 90% Drop in Profit


Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]


AF China Bond