Is the current market “calm” enough for bond issuance as DoCoMo Claims?
NTT DoCoMo, Japan's largest mobile-phone operator, plans to sell about 100 billion yen ($956 million) of bonds in its first issuance in five years, to fund dividend payments and share buybacks.
“We'd like to make the sale while the market is calm, so sometime in the first half of the fiscal year would probably be best,” Chief Financial Officer Masayuki Hirata said in an interview. The amount will in the range of 100 billion yen and won't reach 200 billion yen, he said.
The debt sale will help DoCoMo meet its pledge to pay about 200 billion yen of dividends and buy back as much as 150 billion yen of shares in the year ending March 31. The company's inflow of cash is shrinking after it began allowing customers to pay for mobile phones in installments.
The Tokyo-based carrier last month said the installment plan will reduce its free cash flow to 80 billion yen in the 12 months ending in March 2009, less than the 442.4 billion yen it had a year earlier, as customers spread out handset payments.
DoCoMo's most recent debt sale was $100 million of bonds in March 2003, spokesman Shuichiro Ichikoshi said. The company's biggest bond issue was in March 2001, when it sold 180 billion yen of debt, he said.
Standard & Poor's rates DoCoMo AA, the third-highest level of credit quality.
Annual Returns
DoCoMo on April 25 said it will seek stockholders' approval to buy back as many as 900,000 shares, or 2 percent of its outstanding amount. The operator also said it will maintain its dividend payout at 4,800 yen a share for this year, or a 3.1 percent yield based on the stock's current price.
DoCoMo was unchanged at 153,000 yen as of 12:35 p.m. on the Tokyo Stock Exchange, while the benchmark Nikkei 225 Stock Average gained 1.8 percent. The shares have fallen 18 percent this year, adding to a 1.1 percent decline in 2007.
Corporate bond sales in Japan stopped after an April 25 report showed inflation accelerated, pushing up five-year government bond yields the most since 1999. The benchmark is used to set the rates paid on similar-maturity company debt.
Investors are shifting toward Japanese corporate debt with the highest ratings on concern slower economic growth and higher raw materials costs will reduce profitability.
Sales of bonds with the top four credit ratings have more than doubled to 2.63 trillion yen this year, compared with a year earlier, according to data compiled using ratings from S&P, Moody's Investors Service and Fitch Ratings.
Full-Year Outlook
Net income may increase 2.4 percent to 503 billion yen this fiscal year, as sales rise 1.2 percent to 4.77 trillion yen, DoCoMo said last month. Operating profit, or revenue minus the cost of goods sold and administrative expenses, will probably climb 2.7 percent to 830 billion yen, it said.
DoCoMo almost halved monthly fees in November and started offering free calls among family members last month to retain customers. The company also announced a plan to spend about 10 billion yen to promote a new corporate logo as Softbank and KDDI gain market share.
With Free Calls, a Hefty Budget Set Aside for Logo Re-Design and the Shaky Global Market, Will DoCoMo Outdo its Competitors?
NTT DoCoMo, Japan's largest mobile-phone operator, plans to sell about 100 billion yen ($956 million) of bonds in its first issuance in five years, to fund dividend payments and share buybacks.
“We'd like to make the sale while the market is calm, so sometime in the first half of the fiscal year would probably be best,” Chief Financial Officer Masayuki Hirata said in an interview. The amount will in the range of 100 billion yen and won't reach 200 billion yen, he said.
The debt sale will help DoCoMo meet its pledge to pay about 200 billion yen of dividends and buy back as much as 150 billion yen of shares in the year ending March 31. The company's inflow of cash is shrinking after it began allowing customers to pay for mobile phones in installments.
The Tokyo-based carrier last month said the installment plan will reduce its free cash flow to 80 billion yen in the 12 months ending in March 2009, less than the 442.4 billion yen it had a year earlier, as customers spread out handset payments.
DoCoMo's most recent debt sale was $100 million of bonds in March 2003, spokesman Shuichiro Ichikoshi said. The company's biggest bond issue was in March 2001, when it sold 180 billion yen of debt, he said.
Standard & Poor's rates DoCoMo AA, the third-highest level of credit quality.
Annual Returns
DoCoMo on April 25 said it will seek stockholders' approval to buy back as many as 900,000 shares, or 2 percent of its outstanding amount. The operator also said it will maintain its dividend payout at 4,800 yen a share for this year, or a 3.1 percent yield based on the stock's current price.
DoCoMo was unchanged at 153,000 yen as of 12:35 p.m. on the Tokyo Stock Exchange, while the benchmark Nikkei 225 Stock Average gained 1.8 percent. The shares have fallen 18 percent this year, adding to a 1.1 percent decline in 2007.
Corporate bond sales in Japan stopped after an April 25 report showed inflation accelerated, pushing up five-year government bond yields the most since 1999. The benchmark is used to set the rates paid on similar-maturity company debt.
Investors are shifting toward Japanese corporate debt with the highest ratings on concern slower economic growth and higher raw materials costs will reduce profitability.
Sales of bonds with the top four credit ratings have more than doubled to 2.63 trillion yen this year, compared with a year earlier, according to data compiled using ratings from S&P, Moody's Investors Service and Fitch Ratings.
Full-Year Outlook
Net income may increase 2.4 percent to 503 billion yen this fiscal year, as sales rise 1.2 percent to 4.77 trillion yen, DoCoMo said last month. Operating profit, or revenue minus the cost of goods sold and administrative expenses, will probably climb 2.7 percent to 830 billion yen, it said.
DoCoMo almost halved monthly fees in November and started offering free calls among family members last month to retain customers. The company also announced a plan to spend about 10 billion yen to promote a new corporate logo as Softbank and KDDI gain market share.
With Free Calls, a Hefty Budget Set Aside for Logo Re-Design and the Shaky Global Market, Will DoCoMo Outdo its Competitors?
posted by Charltonmedia.com @ 8:07 PM
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