SoftBank Group is selling high-risk bonds worth 15.3 trillion won to raise money for its investment in OpenAI. Excluding distressed debt exchanges carried out by companies on the brink of default, it is expected to be the largest speculative-grade bond sale ever by a single corporate issuer.
Bloomberg reported on the 21st, citing sources, that SoftBank plans to issue $10 billion and 1 billion euros of junk bonds. The proceeds will first be used for SoftBank's $10 billion payment for the third tranche of its follow-on investment in OpenAI, which must be funded by Oct. 1.
Since pledging $65 billion to OpenAI, SoftBank has taken on large amounts of debt in a variety of forms. Last week it raised the limit on a margin loan backed by shares of Arm, its chip design unit, to $25 billion from $5 billion, and expanded its bank credit facility by $450 million to a total of $6.5 billion. SoftBank has issued $15 billion of bonds in multiple currencies this year, making it the largest speculative-grade borrower in the bond market so far in 2026.
Borrowing costs are rising. As U.S. Treasury yields have climbed, the yield on SoftBank's dollar bonds maturing in 2031 rose to 8.2% this month from a low of 6.7% in January, and the cost of insuring against a default on SoftBank debt reached its highest level in three years. Bloomberg said that expectations for greater liquidity in SoftBank's stake are being shaken after artificial intelligence industry leaders argued for slowing the pace of AI investment and OpenAI Chief Executive Sam Altman said a listing would not be possible this year.
SoftBank is rated BB+ by Standard & Poor's, the highest rung of speculative grade. According to Reuters, the senior unsecured dollar-denominated notes are split into tranches maturing in 3 1/2 years, 5 1/2 years and 7 1/2 years, while the euro-denominated notes consist of four-year and six-year tranches. Pricing is set for the 24th, with settlement expected to be completed on the 29th. Citigroup and JPMorgan are the lead bookrunners.
