As SoftBank Group Corp. continues its transformation into a giant investment fund, some analysts are increasingly watching a metric more familiar to lenders as they judge its creditworthiness. And by that gauge, they say, its massive debt pile looks manageable.
SoftBank¡¯s loan-to-value ratio, its net interest-bearing debt over the value of its investment portfolio, is less than 20 percent, according to separate calculations by Daiwa Securities Group Inc. and SMBC Nikko Securities Inc. The company¡¯s own goal is to keep it under 35 percent, a level that Daiwa considers conservative.
SoftBank, which controls the world¡¯s biggest investment vehicle in the almost $100 billion Vision Fund, has been suggesting so-called LTV as a better measure of its leverage since at least mid-2017, when it was included in an earnings presentation. That isn¡¯t to say concern about the company¡¯s debt has disappeared. The major global credit assessors rate the group at junk, and its bond risk is among the highest for Japanese borrowers.
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