SoftBank Group Corp., the Japanese conglomerate led by billionaire Masayoshi Son, is reportedly preparing a massive high-yield bond offering exceeding $11 billion. This substantial debt issuance aims to fuel the company's aggressive expansion into artificial intelligence, particularly a significant follow-on investment in OpenAI, the creator of ChatGPT.
Massive Debt Sale to Boost AI Stakes
According to reports, SoftBank intends to issue $10 billion in dollar-denominated securities across three tenors, complemented by €1 billion ($1.1 billion) in euro notes across two maturities. The proceeds from this unprecedented debt sale are earmarked to partially finance a new investment in OpenAI, expected to finalize next month.
As a leading investor in artificial intelligence, SoftBank's strategic direction is increasingly tied to its ability to capitalize on its position within OpenAI. The company has already committed nearly $65 billion to the AI startup, positioning itself at the forefront of debt-fueled AI expansion, amidst growing industry discussions about AI safety.
SoftBank's Expanding Debt Portfolio
This latest move follows a series of aggressive debt market transactions by SoftBank to bolster its AI financing reserves. Earlier this year, in March, the firm secured a $40 billion bridge loan, subsequently clearing the remaining $25.9 billion balance. By late last week, SoftBank had accumulated nearly $21 billion in potential new borrowings, including a $5 billion expansion of a margin loan backed by shares in its chip unit, Arm Holdings Plc, bringing that total to $25 billion. Additionally, an existing credit line saw a $450 million increase, reaching $6.5 billion.
Data indicates that SoftBank has already sold close to $15 billion in multi-currency notes this year, making it 2026's largest junk-rated borrower in the bond markets. A separate $10 billion loan was also secured earlier this year, directly backed by its OpenAI stake.
Navigating Rising Borrowing Costs
This aggressive debt strategy unfolds against a backdrop of rising global borrowing costs, driven by persistent inflation. For instance, the yield on SoftBank's dollar bond maturing in 2031 climbed to 8.2% earlier this month, a notable increase from 6.7% in January. This trend reflects wider credit spreads and general rises in Treasury yields, adding a layer of complexity to SoftBank's ambitious financing endeavors.