Moody's may upgrade Softbank bonds

Moody's Investors Service said it kept Softbank Corp.'s €400 million bonds due 2011 on review for possible upgrade now that the bonds benefit from a trust agreement entered into by the company under a legal bond defeasance transaction.

The Ba3 rating on the bonds and the company's other senior unsecured obligations had been placed under review for possible upgrade on March 17 after Softbank had announced that it would purchase Vodafone Japan KK from Vodafone Group plc.

The trust agreement for the legal defeasance of the eurobond has been entered into with third parties. The latter have been entrusted sufficient funds to pay interest on and redeem the principal of the bond. As a result, the probability of default and expected loss of the bond may now be substantially lower, the agency said.

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