TOKYO: SoftBank Group Corp is seeking the equivalent of more than US$11bil in what would be one of the biggest junk bond deals ever, people familiar with the matter say, as billionaire Masayoshi Son’s conglomerate ramps up its investments in ChatGPT creator OpenAI.
The company was looking to issue US$10bil of dollar securities across three tenors, and 1bil (US$1.1bil) of euro notes across two maturities, according to the people yesterday, who asked not to be identified as the discussions are private.
The money will be used in part to fund a follow-on investment in OpenAI expected to close next month, the people said.
The deal may price on Thursday, they added.
One of the world’s largest investors in artificial intelligence (AI), SoftBank’s fortunes have become increasingly intertwined with its ability to monetise its holding in OpenAI after committing close to US$65bil to the tech pioneer.
That’s put Son’s firm at the epicentre of debt-fuelled bets on AI, at a time when safety concerns about the industry have flared.
SoftBank entered into a US$40bil bridge loan in March to fund an additional investment in OpenAI, and repaid the outstanding balance of US$25.9bil on that facility.
It’s been tapping debt markets in a flurry of deals as it builds out its AI financing capacity. It closed out last week with nearly US$21bil in potential fresh borrowings.
The group increased a margin loan backed by shares of its chip unit Arm Holdings Plc by US$5bil to US$25bil, people familiar with the matter said last Friday.
And it recently secured an additional US$450mil to an existing credit line, bringing the total to US$6.5bil.
Apollo Global Management Inc is also in talks to boost the size of a loan to SoftBank by US$3.6bil to US$9bil to help it finance its investment in AI giant OpenAI.
The firm founded and led by billionaire Masayoshi Son secured an US$11.87bil loan, also to support its OpenAI investment, said people familiar with those deals.
As part of its funding campaign this year, SoftBank has sold almost US$15bil of notes across currencies, making it the biggest junk-rated borrower in bond markets in 2026, Bloomberg-compiled data show.
There was also a US$10bil loan earlier this year backed by its OpenAI stake.
The deals come amid a broader increase across markets in borrowing costs, as most major economies grapple with inflation.
The yield on SoftBank’s dollar bond maturing in 2031 climbed to 8.2% earlier this month, up from as low as 6.7% in January, as spreads have widened and underlying Treasury yields have risen, Bloomberg-compiled data show.
Calls by heads of some of the world’s biggest AI platforms, including OpenAI, to slow AI advances on safety concerns, have introduced another layer of uncertainty.
That contributed recently to an increase in the cost to insure SoftBank’s debt against default to the highest in three years.
Chief executive officer of OpenAI Sam Altman’s remarks the company won’t go public this year, a move that would increase the liquidity of SoftBank’s investments, have been closely watched by investors.
If SoftBank sells about US$11bil in debt it would be one of the largest junk bond sales ever by a single firm, excluding distressed debt exchanges. — Bloomberg
