SoftBank launches $11 billion bond sale to fund OpenAI investment

### SoftBank Launches $11 Billion Bond Sale to Fund Additional OpenAI Investment

SoftBank Group has launched a bond offering totaling $10 billion and €1 billion, or approximately $1.15 billion, to help finance its next investment in OpenAI, according to a term sheet released Monday.

The dollar-denominated portion of the offering is divided into three maturities of 3.5, 5.5 and 7.5 years. The euro-denominated notes will mature in four and six years. Pricing for the bonds is scheduled for September 24, with settlement expected on September 29.

If the offering reaches its targeted size, it would become the largest nonfinancial corporate bond transaction ever issued by a company in the Asia-Pacific and Japan region, according to LSEG data cited in the term sheet.

The proposed deal would surpass the $10.93 billion bond sale by 7-Eleven in January 2021. Bloomberg data also indicates that the transaction would rank among the largest corporate bond offerings globally in 2026.

SoftBank plans to use the proceeds primarily to finance a $10 billion contribution toward the third tranche of its follow-on investment in OpenAI. That transaction is currently scheduled to close on October 1.

Part of the proceeds will also be used for general corporate purposes. The new debt will replace a $10 billion bridge loan that SoftBank had previously arranged to help finance the same OpenAI investment.

The bond sale represents another major financing step by SoftBank as the Japanese conglomerate increases its financial exposure to OpenAI and the rapidly expanding artificial intelligence industry.

Dealogic data cited by Reuters places the transaction among the 20 largest corporate bond deals globally so far this year. Fitch Ratings has assigned the proposed notes a BB+ rating, placing them at the highest level within the agency’s speculative-grade category.

Fitch has also indicated that SoftBank’s leverage is likely to rise as the company fulfills its investment commitments. The ratings agency nevertheless expects SoftBank to retain adequate liquidity and continued access to debt markets.

Once the latest investment tranche is completed, SoftBank’s total investment in OpenAI is expected to reach approximately $64.6 billion, according to disclosures accompanying the company’s first-quarter earnings.

The investment would give SoftBank an ownership interest of roughly 13 percent in OpenAI, further strengthening the Japanese group’s position as one of the AI company’s major financial backers.

Citigroup is serving as the lead bookrunner for the dollar-denominated notes, while JPMorgan is leading the euro bond offering.

Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley are acting as joint global coordinators for the dollar notes. JPMorgan, Deutsche Bank and Goldman Sachs are serving in the same capacity for the euro-denominated securities.

The financing comes as SoftBank continues to pursue investments across technology, artificial intelligence and other sectors. The company has been seeking ways to fund its growing commitments while managing its balance sheet and access to capital markets.

SoftBank has also recently been linked to a potential investment in Seven & i Holdings, the Japanese retail group that owns the 7-Eleven convenience-store chain.

According to Bloomberg, SoftBank has discussed an investment potentially worth about 700 billion yen in Seven & i, with Sumitomo Mitsui Card also reportedly considering taking a stake.

The latest bond offering highlights the scale of capital SoftBank is deploying as it builds its exposure to OpenAI while relying on the debt markets to finance part of that strategy.