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SoftBank seeks over $11 billion in junk bonds for OpenAI bet
Bloomberg News reported that SoftBank is seeking more than $11 billion in junk bonds to help finance a follow-on investment in OpenAI. No attributable quotation by a named person appears in the Bloomberg report; it relies on unnamed people
AI.info Team ·
SoftBank seeks debt for its next OpenAI investment
SoftBank Group is seeking more than $11 billion in junk bonds as it expands its investment in OpenAI, according to Bloomberg News. The proposed transaction would rank among the largest high-yield bond deals ever by a single corporate issuer, excluding distressed debt exchanges.
The Japanese conglomerate is looking to issue $10 billion of dollar securities across three maturities and €1 billion of euro notes across two maturities, people familiar with the matter told Bloomberg. The discussions are private, and the sources asked not to be identified.
Part of the proceeds would fund a follow-on investment in OpenAI expected to close next month. SoftBank has committed close to $65 billion to the company behind ChatGPT, making its financial position increasingly tied to the value and eventual liquidity of that investment.
Debt supports a larger OpenAI commitment
The proposed bond issue comes as SoftBank ramps up its financing for artificial intelligence investments. The company has been using debt markets and other borrowing facilities while increasing its exposure to OpenAI and related technology assets.
The planned offering includes both dollar- and euro-denominated securities. Issuing in two currencies would give SoftBank access to a broader pool of fixed-income investors, although it would also add to the group’s outstanding obligations in multiple markets.
SoftBank’s commitment to OpenAI is one of the largest components of its investment strategy. Bloomberg reported that the group’s fortunes have become increasingly intertwined with its ability to generate value from its holding in the artificial intelligence company.
Credit markets will set the terms
The proposed transaction would test investor demand for SoftBank’s credit at a time when the company is raising substantial sums for technology investments. A bond sale of more than $11 billion would give the group a significant presence in the high-yield market and add to the debt already issued to support its strategy.
SoftBank is rated BB+ by S&P Global Ratings, according to Bloomberg, placing it at the highest level of speculative-grade credit. That rating remains below investment grade and means investors will weigh the company’s borrowing costs against the potential value of its stakes in OpenAI and other technology companies.
The financing also reflects the difference between raising capital through equity and issuing debt. Bondholders receive contractual payments and repayment of principal, while SoftBank’s returns from OpenAI depend on the company’s future performance, valuation and ability to provide liquidity to investors.
OpenAI remains the central use of funds
SoftBank’s proposed bond issue is part of a broader effort to finance its growing artificial intelligence portfolio. The company has committed nearly $65 billion to OpenAI and is continuing to seek funding as it prepares for the next stage of that investment.
For now, Bloomberg’s report describes a planned financing rather than a completed bond sale. SoftBank is seeking $10 billion in dollar securities and €1 billion in euro notes, with part of the proceeds expected to support its follow-on investment in OpenAI next month. The size of the proposed deal would make it a major event in the junk-bond market if completed.