Business & Markets
SoftBank sets $11.1 billion bond terms to fund OpenAI stake
The planned high-yield issue carries rates as high as 9.75% on dollar notes; the company expects to issue the debt September 29 and close the OpenAI payment October 1.
Executive summary
- The offering: SoftBank Group set terms for $10 billion of dollar notes and €1 billion of euro notes, about $11.1 billion combined at the company's stated exchange rate.[1][2]
- The purpose: The company plans to use proceeds for the final $10 billion installment of its $30 billion follow-on OpenAI investment and for general corporate purposes.[1][2]
- The cost: The dollar tranches carry annual rates of 8.625%, 9.25% and 9.75%; the euro tranches carry 7.125% and 8%.[1][2]
- The timing: The announced issue date is September 29, while the OpenAI tranche is expected to close October 1. Neither future step had occurred when the terms were announced.[1]
SoftBank Group on Thursday announced terms for roughly $11.1 billion in dollar- and euro-denominated senior notes, a financing package intended in part to cover the last $10 billion payment of its $30 billion follow-on investment in OpenAI. The package comprises $10 billion in dollar notes and €1 billion in euro notes; the dollar equivalent uses SoftBank's stated exchange rate.[1][2]
The three dollar tranches are $1 billion due in 2030, $4.5 billion due in 2032 and $4.5 billion due in 2034, with annual interest rates of 8.625%, 9.25% and 9.75%, respectively. Two €500 million tranches mature in 2030 and 2032 and carry rates of 7.125% and 8%. SoftBank said the notes are unsecured, lack a guarantee and carry BB+ ratings from S&P Global Ratings and Fitch Ratings Japan.[1]
Reuters, citing LSEG data, described the planned financing as the largest high-yield corporate bond issue globally on record. The size and rates put a price on SoftBank's concentrated AI financing strategy, but the company's announcement does not establish the return its OpenAI investment will ultimately earn. Reuters reported that credit analysts are watching SoftBank's debt burden and exposure to AI valuations.[2][1]
SoftBank expects the notes to be issued September 29 and the OpenAI payment to close October 1. It also expects to cancel $10 billion of unused capacity under an earlier bridge facility. These remain planned steps, and the announced terms should not be read as proof that the notes have settled or the final OpenAI investment has closed.[1]