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news story on financial website Bloomberg.com indicated that last week Sony took out an ¥80 billion ($698 million) three-year floating-rate bank loan, as PlayStation 3 production expenses loom.
The report noted that Sony confirmed that the loan, which came from more than 20 Japanese lenders, was made “to diversify funding sources”, and represented the company's first bank borrowing in 10 years.
According to the report, 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 company is ramping up production on multiple products this year, with its PlayStation 3 next-gen console, including the company's Blu-ray disc format, perhaps key.
Shinichi Tobe, Sony's spokesman, also noted that the total funds acquired ended up being more than Sony had originally anticipated, and offered more flexibility than what the company would have had with bonds.
Elsewhere in the report, spokesman Koji Kurata indicated that Sony will use the funds for “general purposes”, and that it plans to invest an additional 20 percent, or ¥460 billion ($4 billion), in its facilities in the coming year beginning in April. This was reported to include ¥176 billion ($1.5 billion) for semiconductor manufacturing and ¥100 billion ($871 million) for a liquid-crystal display venture with South Korea-based Samsung Electronics.
