TOKYO -- Softbank Corp. said it will procure a total of 1.45 trillion yen ($12.3 billion) in late November to refinance bridge loans it took out this year to buy the Japanese operations of U.K. mobile-phone operator Vodafone Group PLC.

The fund procurement will likely help alleviate immediate concerns over its finances. Softbank has been looking to refinance the 1.28 trillion yen in bridging loans, because the interest repayments will increase this month.

The new loans and notes will take the form of long-term debt collateralized by the mobile-phone business. That was possible because, unlike much of Softbank's Internet-related businesses, the mobile-phone operation is a relatively good source of cash flow, bankers familiar with the transaction said.

Because the plan is backed by the mobile-phone unit's steady cash flow, the new loans and notes will have higher credit ratings than those of Softbank itself, the bankers said.

Softbank said the deal will comprise 1.15 trillion yen in Class A debt and 300 billion yen of Class B debt. Class A debt has a lifespan of as long as 10 years, while Class B debt lasts as long as 13 years.

The Class A funding loans and notes received preliminary ratings of A by Standard & Poor's Ratings Group and A3 by Moody's Investors Service Inc. The Class B funding loans and notes have received preliminary ratings of BBB from S&P and Baa3 from Moody's. Softbank itself has a BB-minus rating from S&P and a Ba2 rating from Moody's, both of which are sub-investment grades.

Source : http://online.wsj.com