April 6, 2018 / 2:30 PM / 5 months ago

SoftBank borrows $8 billion using its Alibaba stake: Bloomberg

(Reuters) - Japan’s SoftBank Group Corp has taken a $8 billion margin loan backed by its stake in Chinese online retailer Alibaba Group Holding Ltd, Bloomberg reported, citing people familiar with the matter.

A man walks past the logo of SoftBank Group Corp at the company's headquarters in Tokyo, June 30, 2016. REUTERS/Toru Hanai - S1AETMZFZMAA

The loan, guaranteed solely by its stake in Alibaba, won't be reflected in SoftBank's debt, likely protecting it from a potential ratings downgrade, according to the report here

In a margin loan, a borrower secures the debt by pledging an asset with the understanding that they’d need to pay up if the value of the collateral declines, the report said.

SoftBank, which has a 29 percent stake in Alibaba, could not immediately be reached for comment, outside regular business hours.

Reporting by Akshara P in Bengaluru; Editing by Shailesh Kuber

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