Press Release


The press releases on this website are provided for historical reference purposes only. Please note that certain information may have changed since the date of release.
December 1, 2003




Issuance of Euro Yen Zero Coupon Convertible Bonds due 2008
-Toward the Implementation of Growth Strategy of Transformation 60-


At the Executive Board held today, Sony Corporation ("Sony") has decided the issuance of the Euro Yen Zero Coupon Convertible Bonds due 2008 (bonds with stock acquisition rights, tenkanshasaigata shinkabu yoyakuken-tsuki shasai or the "Bonds") in the maximum principal amount of ¥250 billion (including those in the maximum amount of ¥30 billion to be issued upon exercise of the Greenshoe Option) with a contingent conversion feature.
Purpose of Financing
On October 28, 2003, Sony announced "Transformation 60" ("TR60"), a series of fundamental reforms across the Sony Group, consisting of two pillars; growth strategy through convergence of the Group's resources and technology; and a second phase of structural reforms aimed at enhancing the Group's operational profit structure. This financing is intended to provide strong support from a financial strategy perspective for the TR60, where growth strategy and structural reforms are simultaneously pursued, and should enable implementation of focused investments in growth areas.
Use of Proceeds and Objective
The proceeds will be applied primarily to make capital investment for growth in semiconductors and key devices, in order to accelerate convergence strategies in Sony's Home Electronics (including Game) and Mobile Electronics. Specifically, the proceeds will be allocated to finance investments for the development and manufacturing of semiconductors such as CELL, a highly-advanced processor that will be embedded in a broad range of next-generation digital consumer electronics products, and key devices including display devices.

Zero coupon financing allows to support forthcoming investments and structural reform. At the same time, by targeting a conversion price with a high premium, that exceeds market value (with a premium of more than 45 percent) and by further adding a contingent conversion feature (*), the Bonds are structured to minimize potential dilution of earnings until the TR60 has generated sufficient returns.

Improved profitability through the TR60 could lead to the conversion of the Bonds, which will further strengthen our equity position and provide increased opportunity for further investments for growth.

*Contingent conversion feature: This condition limits investors to exercise the conversion rights unless the share price is above a certain level of the conversion price for a certain period of time or longer. In this case, 1) in the initial 4 year period, if the share price for any 20 trading days in a period of 30 consecutive trading days in the previous quarter is more than 110 percent of the conversion price, 2) in the final year, at any time after the share price is more than 110 percent of the conversion price for at least one trading day, bondholders may exercise the stock acquisition rights. Dilution will not be recognized under US GAAP until the conditions are met for exercising the stock acquisition rights.
Note: This press release is intended as general information regarding Sony Corporation's issuance of convertible bonds and shall not be considered an offering of securities. This press release shall not be construed as an offering of securities in any region including Japan, the United States or Canada. The securities may not be offered or sold in the United States absent registration or an applicable exemption under the Securities Act of 1933. In the event of an offering of securities in the United States, a prospectus in English prepared in accordance with the Securities Act of 1933 will be used. This transaction does not involve any public offering of securities in the United States. Stabilization/FSA