SoftBank raises $11.1 billion in record bond sale to fund OpenAI bet
SoftBank Group has raised $11.1 billion through dollar- and euro-denominated bonds, setting a global record for a high-yield corporate bond sale as the Japanese technology investor continues to mobilize billions of dollars for its growing bet on OpenAI and artificial intelligence.
The latest financing includes $10 billion in US dollar bonds and €1 billion in euro-denominated notes, with a significant portion of the proceeds earmarked for the final $10 billion installment of SoftBank’s $30 billion follow-on investment in OpenAI.
The third tranche is expected to close on October 1, following two previous $10 billion investments completed in April and July.
Once completed, SoftBank’s cumulative investment in the ChatGPT maker will reach approximately $64.6 billion, underlining the scale of founder Masayoshi Son’s strategy to position the Japanese group at the center of the global AI industry.
Largest high-yield corporate bond sale on record
The $11.1 billion transaction is the largest high-yield corporate bond offering ever recorded globally, according to LSEG data, surpassing the previous $10.9 billion record set by French telecom group Numericable in 2014.
SoftBank divided its $10 billion dollar offering into three tranches.
A $1 billion tranche with a 3.5-year maturity carries an interest rate of 8.625%, while two $4.5 billion tranches with maturities of 5.5 and 7.5 years carry rates of 9.25% and 9.75%, respectively.
The company also issued two €500 million tranches with four- and six-year maturities, yielding 7.125% and 8%.
The relatively high yields illustrate the cost SoftBank is paying to finance its aggressive expansion into AI, particularly when compared with investment-grade technology companies tapping global debt markets.
Investor demand, however, remained strong. Orders for the $10 billion dollar portion exceeded $30 billion, according to Reuters, allowing the company to price the bonds at or below the lower end of initial guidance.
OpenAI at the center of SoftBank’s financing push
SoftBank agreed in February to make an additional $30 billion investment in OpenAI through SoftBank Vision Fund 2, divided into three $10 billion tranches.
The company completed the second installment in July and is scheduled to make the final $10 billion payment on October 1.
To initially finance its OpenAI commitments and other corporate requirements, SoftBank secured a $40 billion bridge facility in March from lenders including JPMorgan Chase, Goldman Sachs, Mizuho Bank, Sumitomo Mitsui Banking Corporation and MUFG Bank.
SoftBank later announced plans to repay $25.9 billion of the outstanding bridge facility ahead of schedule as it shifted toward longer-term financing alternatives.
The new bond issue is part of that broader refinancing strategy, replacing shorter-term funding with longer-dated debt while providing cash for the remaining OpenAI commitment.
SoftBank’s AI bill keeps growing
OpenAI is only one part of SoftBank’s expanding AI investment portfolio.
The Japanese group is also deploying billions of dollars across semiconductors, robotics, data centers and other infrastructure expected to underpin the next generation of artificial intelligence services.
This expanding investment programme has significantly increased SoftBank’s financing requirements.
Earlier in September, the company also issued ¥1 trillion, equivalent to around $6.3 billion, in bonds targeting retail investors.
SoftBank’s borrowing strategy reflects Son’s conviction that artificial intelligence will become one of the defining investment opportunities of the coming decades, with the group increasingly concentrating capital around companies and infrastructure linked to AI.
A costly bet on the AI boom
The scale of SoftBank’s financing is also drawing greater attention to the financial risks surrounding the global AI investment boom.
The cost of insuring SoftBank’s debt against default has risen, while yields on its latest bonds are substantially higher than those paid by major investment-grade technology companies.
Satoru Aoyama, Senior Director at Fitch Ratings, told Reuters that the size of investor demand was a positive surprise, noting that large US hyperscalers have already been raising substantial amounts of debt but generally carry much stronger credit ratings.
SoftBank’s latest transaction suggests that large-scale AI financing is now extending deeper into the high-yield debt market.
For SoftBank, the strategy represents a major financial commitment to its belief that OpenAI and the infrastructure surrounding artificial intelligence can generate significant long-term value.
The record $11.1 billion bond sale also demonstrates the other side of that bet: building a position at the center of the AI economy is requiring SoftBank to raise capital on a scale rarely seen before in the global high-yield corporate debt market.