SoftBank Group launched an approximately $11 billion bond sale on Monday to finance its next installment in OpenAI, while cancelling a previously arranged $10 billion bridge loan for the same commitment. The deal, led by Citigroup and JPMorgan, includes $10 billion of dollar-denominated senior unsecured notes and €1 billion of euro-denominated notes, split into five tranches with pricing scheduled for September 24 and settlement on September 29.
The dollar notes carry maturities of 3.5, 5.5, and 7.5 years, while the euro notes have 4-year and 6-year terms. Proceeds will fund the $10 billion third tranche of SoftBank’s follow-on OpenAI investment, due to close October 1, with the remainder for general corporate purposes. Fitch assigned the proposed notes a BB+ rating, and the transaction could rank among the largest junk bond sales ever by a single company and the largest non-financial corporate bond offering in Asia-Pacific and Japan on record.
SoftBank previously arranged a $40 billion bridge facility in March, then said on September 9 it had prepaid the entire $25.9 billion outstanding, with $30 billion drawn. The broader OpenAI commitment stems from a February 27 pledge of $30 billion through Vision Fund 2 at a pre-money valuation of $730 billion, paid in three equal installments on April 1, July 1, and October 1. SoftBank has pledged close to $65 billion for about a 13% stake in OpenAI, funded through loans, asset sales, and credit lines, including a margin loan against Arm shares widened to $25 billion and a credit line increased to $6.5 billion.
Yields underscore the financing pressure: SoftBank’s dollar bond due 2031 surged to 8.2% this month from 6.7% in January, while the cost to insure its debt against default hit a three-year high. The group is rated BB+ by S&P and Fitch. OpenAI CEO Sam Altman has said the company will not go public this year, delaying the liquidity a listing could provide SoftBank.
