SoftBank Group is pushing its OpenAI financing deeper into the high-yield debt market, launching more than $11 billion of dollar- and euro-denominated bonds just days before a $10.00 billion payment tied to its latest investment in the artificial intelligence company.
The sale includes $10 billion of US dollar senior unsecured notes across 3.5-, 5.5-, and 7.5-year maturities, plus €1 billion, or about $1.15 billion, of 4- and 6-year euro notes, according to a term sheet reported by Reuters.
Proceeds are intended to fund SoftBank’s third $10 billion tranche into OpenAI, expected to close October 1, and for general corporate purposes.
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If completed at the planned size, the offering would set a record for a non-financial corporate bond sale in Asia-Pacific and Japan, exceeding 7-Eleven’s $10.93 billion transaction in 2021, according to LSEG data cited by Reuters. Fitch assigned the proposed notes a BB+ rating, at the upper end of speculative grade.
The borrowing cost is the sharper part of the transaction. Bloomberg reported preliminary yield discussions in the low-9% range for the 3.5-year dollar notes, around the mid-9% range for the 5.5-year tranche, and from the high-9% range to roughly 10% for the 7.5-year debt.
Those levels could change before pricing, which is expected September 24.
SoftBank had already committed $30 billion of follow-on capital to OpenAI in February, split into three $10.00 billion installments. The company said completing the investment would take its cumulative OpenAI investment to $64.60 billion and its estimated ownership to about 13%.
The financing follows another major balance-sheet move as SoftBank said it would prepay $25.90 billion outstanding under a $40 billion bridge facility on September 15. Reuters’ term-sheet reporting separately said the new notes would replace a $10.00 billion bridge facility connected to the OpenAI investment.
SoftBank reported a 13.0% loan-to-value ratio as of June 30, with ¥72.30 trillion of net asset value, ¥83.11 trillion of holdings, and ¥10.81 trillion of net debt. Its stated policy is to keep LTV below 25% under normal market conditions.
The bonds are scheduled to settle September 29, two days before SoftBank’s third OpenAI tranche is due.
