SoftBank Smashes Fundraising Records: Giant Issues Yen Bonds as OpenAI Commitment Soars Past $60 Billion

SoftBank Smashes Fundraising Records: Giant Issues Yen Bonds as OpenAI Commitment Soars Past $60 Billion​

SoftBank Group Corp. successfully priced a $\text{¥}90$ billion ($\$550$ million) bond offering, selling the securities exclusively to institutional investors. The massive funding effort allows the conglomerate to significantly ramp up its strategic investments in artificial intelligence.

This move underscores SoftBank's aggressive strategy to diversify and widen its global financing base amid rapidly growing capital requirements.

SoftBank Prices $\text{¥}90$ Billion Yen Bond at Top Coupon Rates​

The offering is structured across two tranches: $\text{¥}80$ billion in three-year notes and $\text{¥}10$ billion in five-year notes, according to lead manager Daiwa Securities Co. The bonds offer premium coupons compared to Japanese government issues (JGBs).

The three-year tranche was priced at 165 basis points above JGBs, carrying a 3.270% coupon. Meanwhile, the five-year portion was set at 190 basis points over, with a robust 3.886% coupon rate. These bond offers represent the highest coupons paid in a sale to institutional investors for these maturities by any domestic corporate borrower.

The demand from investors drove an increase in the three-year tranche size. Initially planned for $\text{¥}50$ billion, the allocation was boosted to $\text{¥}80$ billion due to strong investor preference for shorter-dated tenors within the rising rate environment.

Diversified Funding Supports Massive AI Investment Push​

The bond issuance is part of a broader push by SoftBank to stabilize and expand its capital base. This financing aligns with Masayoshi Son's "all in" commitment to OpenAI, where company commitments now exceed $\$60$ billion.

To support the AI investments, SoftBank has already arranged a $\text{¥}40$ billion bridge loan through a broader syndication phase involving 21 lenders. Previously, efforts to secure at least $\$6$ billion from a margin loan backed by its OpenAI stake had stalled following a reduction of their initial target from $\$10$ billion.

Beyond institutional debt, SoftBank continues to employ varied fundraising methods. The firm has raised $\text{¥}678$ billion so far this year through subordinated bonds sold directly to retail investors. In April alone, the company raised approximately $\text{¥}570$ billion via US dollar- and euro-denominated offerings in overseas markets.

S\&P Boosts Outlook Despite Surging Debt Burden​

S\&P Global Ratings recently reviewed SoftBank's credit standing amidst its escalating debt burden. The agency revised the outlook on the conglomerate’s BB+ rating to stable.

This positive adjustment was partially attributed by S&P to gains observed in the share price performance of its subsidiary, Arm Holdings Plc. These developments confirm the tech behemoth’s efforts toward consistent capital market engagement and operational diversification.