Whole-company securitisation

The financing structure that let a BB-rated SoftBank borrow for Vodafone Japan.

Lionel Barber's framework, from Gambling Man, pp. 148 to 187.

Target a BBB rating
Aim for the rating needed to support a high-yield bond.
Pledge all cash flow to bondholders
Route every yen of group cash flow to bondholders before any dividend.
Add covenants
Give the banks many covenants to improve the credit rating.
Show strong projections
Present cash-flow forecasts for the acquired business to the rating agencies.
Offer a break fee
Promise a ¥60bn break fee if the deal fails, reversing the usual convention.

From chapter: PART THREE: THE OPERATOR, pp. 148–187

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