Softbank to Report $748 Million Loss on CDO Debt Obligations

Published on: 13th April 2009

Japan's Softbank Corp, which operates the country's smallest mobile network says that it will report a JPY 75 billion (US$748 million) loss on CDO's which were used to insure against defaults on the debt it took out to buy Vodafone's Japanese operations.

The company had warned of the possible loss last year, when six of the 160 reference securities used to rate its CDO obligations defaulted due to the global economic downturn.

Despite the loss, the firm still expects to post a full year profit. The impact on net income after tax effects is ecpected to be around JPY 44.4 billion (US$450 million).

The company also upgraded its forecasted consolidated operating income by JPY 10 billion to JPY 350 billion as a result of continued efforts in cost management and increased managerial efficiency.
In addition, consolidated free cash flow was forecast at JPY 150 billion until now but this forecast has been revised upwardly by JPY 20.0bn to JPY 170 billion.

The company did not offer a net profit forecast. The full results are due to be announced on 30th April.

Softbank Corp purchased Vodafone K.K. in March 2006 for around $15 billion.

 

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