TOKYO: SoftBank Group Corp plans a record one trillion yen (US$6.3bil) retail bond sale, the biggest by any issuer in Japan, as the conglomerate raises funds for its investment commitments to OpenAI.
The seven-year bonds are expected to be priced on Sept 4, with an indicative coupon range of 4.3% to 4.9%, according to a company filing.
SoftBank’s move is the latest in a global rush to amass funds in the hyper-competitive race for global leadership in artificial intelligence.
Alphabet Inc, Meta Platforms Inc, Microsoft Corp and Amazon.com Inc – the four largest players in the data centre (DC) race – have pledged nearly US$2.4 trillion in artificial intelligence (AI)-related spending over the coming years.
On Monday Alibaba Group Holding Ltd raised the equivalent of US$10bil in Hong Kong’s biggest-ever secondary share sale to help fund its efforts to pour money into chips, DCs and large-language models.
SoftBank has committed more than US$60bil to invest in the ChatGPT developer and has been accelerating investments in DCs as it seeks to expand computing capacity.
The spending comes as questions about how to monetise the technology persist alongside warnings about overcapacity, growing corporate debt and the circular nature of many AI fundraising deals.
The company said in a press release on Monday that it expects the bonds to get an A rating from Japan Credit Rating Agency Ltd.
“The company is betting that retail investors will buy a product offering an attractive yield, and it appears confident it can tap demand at a time when there are few fixed-income products that can beat inflation,” said Yuuki Fukumoto, senior financial researcher at NLI Research Institute.
“Banks are finding it difficult to take on the risk given weak deposit growth, the credit rating and the seven-year duration, leaving the deal more reliant on retail investors,” Fukumoto said.
The offering will be SoftBank’s third retail bond sale this year, after it raised 418 billion yen in April and 260 billion yen in June. — Bloomberg
