SoftBank revives $10B loan talks backed by OpenAI stake

SoftBank Group has resumed negotiations with a consortium of lenders for a $10 billion margin loan secured by its stake in OpenAI, months after earlier attempts to arrange the financing fell apart over concerns about valuing the private AI company, according to a Reuters report on Tuesday.investing

To overcome lender resistance, SoftBank is now offering to personally guarantee repayment of the loan, a structure that would give banks recourse to the broader company if the OpenAI shares used as collateral decline in value. Under the earlier proposed terms, lenders would have had no claim on SoftBank beyond the pledged shares, and SoftBank would not have been required to repay the debt if the collateral lost value.investing

A Winding Path to Financing

The margin loan saga began in April when Bloomberg first reported SoftBank was seeking $10 billion in a two-year facility with a one-year extension option, priced at roughly 425 basis points above the secured overnight financing rate. By May, the company had scaled back its target to $6 billion after creditors voiced hesitation about lending against shares in a private company. In June, Bloomberg reported that even the reduced talks had stalled entirely.bloomberg+5

The lending consortium is expected to include Goldman Sachs ↗ 3.16%, JPMorgan Chase ↗ 0.49%, and Mizuho Financial Group ↗ 3.62%.investing

Deepening the OpenAI Bet

The revived loan discussions come as SoftBank continues to pour capital into OpenAI at a rapid pace. The company announced on July 1 that it executed the second $10 billion tranche of a planned $30 billion follow-on investment in OpenAI through SoftBank Vision Fund 2, with a third tranche of equal size expected on October 1. SoftBank funded the investment through borrowings under a bridge facility agreement entered into on March 27.group

Upon completion of the full $30 billion follow-on, SoftBank's cumulative investment in OpenAI is expected to total $64.6 billion, representing an ownership interest of approximately 13 percent. SoftBank has also used debt extensively to fund its AI ambitions, including a bridge facility of up to $40 billion arranged earlier this year.group+1

Lender Caution Persists

The negotiations underscore growing caution among banks toward loans secured by stakes in private companies, whose valuations are harder to determine and whose shares cannot be easily sold on public markets. SoftBank has previously explored a $5 billion margin loan backed by shares in Arm Holdings ↗ 4.29%, whose stock has risen amid investor enthusiasm for AI.investing