SoftBank launches $11B bond sale to fund OpenAI bet

SoftBank Group has launched more than $11 billion in senior unsecured notes to help finance its ongoing investment in OpenAI, according to a term sheet reviewed by Reuters — a deal that would rank among the largest-ever junk bond offerings.ksl+1

The offering comprises $10 billion in dollar-denominated notes and 1 billion euros in euro-denominated notes. The dollar bonds are split across three maturities — 3.5-year, 5.5-year, and 7.5-year tenors — while the euro tranche is divided into 4-year and 6-year bonds. Citigroup ↘ 0.70% and JPMorgan ↗ 0.10% are serving as lead bookrunners.channelnewsasia+1

Funding the OpenAI Bet

The proceeds will go toward SoftBank's $10 billion third-tranche payment for its follow-on investment in OpenAI, which is expected to close on October 1. The bonds will replace a $10 billion bridge loan facility that SoftBank had previously secured to cover the payment.ksl+1

The issuance is the latest chapter in SoftBank's borrowing spree to fund what has become one of the most aggressive bets in technology investing. In February, SoftBank committed to $30 billion in follow-on investments in OpenAI, structured in three quarterly tranches of $10 billion each throughout 2026. The first two tranches closed in April and July, respectively, bringing SoftBank's cumulative investment in OpenAI to roughly $64.6 billion and giving it an approximately 13% ownership stake.group+2

A Junk-Rated Borrower on a Historic Scale

SoftBank Group carries junk credit ratings of BB+ from both S&P and Fitch, placing it below investment grade. The company has leaned heavily on debt markets this year, issuing $3.6 billion in high-yield bonds in April and launching a record ¥1 trillion ($6.3 billion) retail bond sale in Japan in late August.bloomberg+4

The bond issuances announced Monday are expected to price on September 24 and settle on September 29. SoftBank could not immediately be reached for comment, as it was a holiday in Japan.channelnewsasia+1

Market Context

Investors have closely watched how SoftBank finances its AI ambitions. The company's Vision Fund booked a $46 billion yearly gain driven largely by its OpenAI stake, according to results reported in May. But the scale of its commitments — with tens of billions in obligations due across 2026 — has raised questions about leverage and funding costs. In April, the yield on SoftBank's 10-year dollar bond reached 8.5%, the highest ever for the company.reuters+2