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Thu 26 Sep 2019 08:21 AM

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Goldman is cutting its loan exposure to SoftBank's Vision Fund

SoftBank has suffered a string of bad news this week

Goldman is cutting its loan exposure to SoftBank's Vision Fund
Goldman Sachs has deep ties to SoftBank, working with the company to raise a second Vision Fund and advising founder Masayoshi Son’s businesses on several deals in recent years.

Goldman Sachs Group is seeking to offload a portion of its stake in a $3.1 billion credit line it helped arrange for SoftBank Group’s Vision Fund, according to people with knowledge of the matter.

The New York lender has approached other financial institutions to take on some of its lending commitment to decrease its risk, said one of the people, who asked not to be identified because the talks are private. Goldman has been looking to cut its exposure to the facility for the last few months, one of the people said.

The bridge facility, which Goldman and Mizuho International began arranging last year, enables the behemoth investment vehicle to more quickly pounce on transactions. The loan was syndicated to other banks including Standard Chartered, Citigroup, Barclays and Royal Bank of Canada, according to a SoftBank presentation in May.

Goldman is offering the debt at prices slightly below par, the people said. While it’s not uncommon for lead banks to syndicate their share of loans, Goldman already reduced its exposure in May by bringing in additional lenders.

Now, the firm is looking beyond the existing group, and at least one of the original 10 lenders isn’t interested in boosting its exposure, one of the people said. Goldman is offering to sell the credit line in pieces as small as $50 million, one of the people said.

Goldman indicated to the Vision Fund when it committed to the loan that it would look to reduce its exposure over time, said a person close to the fund.

Representatives for Goldman Sachs and SoftBank Vision Fund declined to comment.

SoftBank has suffered a string of bad news this week, from the stalled initial public offering of one of the Japanese company’s biggest wagers, WeWork, to fresh doubts over the sale of its debt-laden mobile phone company, Sprint Corp. The cost to protect against nonpayment by SoftBank in the credit-default swaps market jumped Wednesday, according to ICE Data Services.

Goldman Sachs has deep ties to SoftBank, working with the company to raise a second Vision Fund and advising founder Masayoshi Son’s businesses on several deals in recent years.

SoftBank’s first Vision Fund, which counts Saudi Arabia’s Public Investment Fund as its largest investor, has backed firms including messaging software company Slack Technologies Inc., ride-hailing giant Uber Technologies Inc. and embattled office-sharing start-up WeWork. It’s also invested in 10X Genomics Inc., whose shares have jumped since it went public this month, and Guardant Health.

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