Japanese electronics giant Sony plans to raise 150 billion yen (US$1.9 billion) through a sale of convertible bonds to help finance a series of investments.
Zero-coupon bonds, as the name suggests, do not pay a periodic coupons or interest, but are usually instead redeemed for profit at full maturity. The convertible feature allows the bonds to be converted into common stock at a certain price--in this case at 957 yen or 10 percent above yesterday's closing price.
The sale is the first convertible bond from Sony since 2003, noted Bloomberg.
"Convertible bonds was probably the only option for Sony," Tadashi Fujii, an analyst at research company Fisco, told the newswire.
He pointed out the and an equity finance approach would have led the share prices to decline much more because of the dilution.
The bond issue comes as it claws its way back to a recovery after losing US$5.7 billion last year. In its second quarter results released earlier this month, it
, compared with US$27 million a year ago.
The company had last month
Sony was worth more than US$120 billion in 2000, and is now valued at about US$11 billion, according to Bloomberg. This compares with
and Samsung Electronics at US$184 billion, it added.