Sony Corp., the world's second- largest consumer electronics maker, said it took out an 80 billion yen ($698 million) syndicated loan last week, its first bank borrowing in 10 years, to diversify funding sources.
The three-year floating-rate loan, which came from more than 20 Japanese lenders, pays 4 basis points more than the London interbank offered rate, or Libor, for six-month yen borrowings, said Mizuho Financial Group Inc., the loan arranger. The six-month yen Libor was last quoted at 0.44750 percent.
Sony tapped the country's expanding syndicated loan market as it offered a cheaper source of cash at a time when investors in corporate debt are demanding higher yields before an expected rise in Japanese interest rates this year. The fund-raising, which ended up bigger than initially planned, offered more flexibility than bonds, said Shinichi Tobe, Sony's spokesman.
i just hope these guys know what they're doing man. we don't want another ENRON now do we?
take note, this is a huge loan before the insane loss in PS3's per unit. How ready is Sony to loose 400 bucks per console. When they get to 10 million that'll equal == 4 BILLION. Compared to this loan of 700 million really shatters my confidence in them being able to pull off blu-ray.
now I know somebody's gonna spit out a last years revenue so let it begin.
Hav u read the full article,it for axpansion to there manurfacuring plants of LCD's(this is a huge groth industry and worth the joint investment),Also will help off the cost of makin PS3,Its around $150-$200 that sony may loss per console not $400.Also expect Sony to advertise PS3,Bluray,LCD's etc which all costs alot.
#3.1 - Do the sums,if PS3 costs around $750-$800 to make.And Sony sells PS3 for $600(60Gb),that a lost of around $150-$200 and less on the $500(20Gb) PS3.
A bond is a loan generated by the company. You (the investor) buy a bond, in return you get a return on it. Bonds mature within a certain period of time.
A loan is the company borrowing money from a financial institution (banks). In this case 20 banks.
I don't really have much to say. Obviously Sony felt they were getting a better rate with the loan, the money isn't even being used for PS3 stuff...what's to say?