As SoftBank Group Corp. continues its transformation into a giant investment fund, some analysts are increasingly watching a metric more familiar to lenders as they judge its creditworthiness. And by that gauge, they say, its massive debt pile looks manageable.
SoftBank's loan-to-value ratio, its net interest-bearing debt over the value of its investment portfolio, is less than 20 percent, according to separate calculations by Daiwa Securities Group Inc. and SMBC Nikko Securities Inc. The company's own goal is to keep it under 35 percent, a level that Daiwa considers conservative.
SoftBank, which controls the world's biggest investment vehicle in the almost $100 billion Vision Fund, has been suggesting so-called LTV as a better measure of its leverage since at least mid-2017, when it was included in an earnings presentation. That isn't to say concern about the company's debt has disappeared. The major global credit assessors rate the group at junk, and its bond risk is among the highest for Japanese borrowers.