Softbank Corp. plans to sell ¥400 billion in bonds targeting individual investors to fund its $20.1 billion purchase of Sprint Nextel Corp.

The mobile phone company will price the five-year notes to yield from 1.25 percent to 2.25 percent on June 3, according to a filing with the Finance Ministry on Tuesday. The securities will be offered from June 4 to 19, according to the filing. The offering will be the largest by Softbank, which has raised the equivalent of $6.9 billion in bonds since the transaction was announced in October, data compiled by Bloomberg show.

The acquisition is being challenged by Dish Network Corp.’s $25.5 billion offer. President Masayoshi Son, Japan’s second-richest person, reiterated this month he won’t increase the bid, even as firms from Daiwa Securities Group Inc. to BNP Paribas SA say the company has scope to raise the amount by $5 billion. Softbank plans to complete the deal under the terms announced on July 1.

Softbank will use proceeds from the latest bond sale to help pay for the Sprint Nextel acquisition and to repay maturing debt, Tokyo-based spokesman Takeaki Nukii said in a telephone interview Tuesday, declining to provide the breakdown.

The offering will be managed by nine brokerages, including Daiwa Securities and Nomura Holdings Inc., according to the filing.

Japan’s third-largest wireless operator offered ¥300 billion in 1.47 percent four-year bonds to individuals, often also referred to as retail investors, in February, according to data compiled by Bloomberg. The company raised $2.485 billion and €625 million in seven-year notes last month, the data show.

Moody’s Investors Service rates Softbank at Baa3, its lowest investment grade, while Standard & Poor’s has it at BBB, its second-lowest, the data show. Moody’s said last month it’s reviewing its rating because the outcome of the deal is uncertain following the Dish Network bid.

S&P has placed the carrier on credit watch with negative implications. The risk assessor may cut the grade by two levels to BB+ should the transaction proceed, it said in a March 29 statement.

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