SoftBank Group is tapping global bond markets for approximately $11.1 billion as the Japanese investment conglomerate prepares to finance another major commitment to artificial intelligence company OpenAI.
The financing consists of $10 billion in US dollar-denominated senior unsecured notes and €1 billion in euro-denominated bonds, equivalent to roughly $1.15 billion.
The bonds are expected to be priced on September 24 and settle on September 29.
If completed at the planned size, the transaction would become the largest non-financial corporate bond issue in the Asia-Pacific and Japan region, according to LSEG data cited by Reuters.
$10bn Goes Towards OpenAI
The bulk of the proceeds will finance a $10 billion payment representing the third tranche of SoftBank’s follow-on OpenAI investment, expected to close on October 1.
The financing will replace a $10 billion bridge loan SoftBank had previously secured for the investment.
SoftBank’s dollar bonds are divided into maturities of 3.5, 5.5 and 7.5 years, while the euro offering contains four-year and six-year notes.
Citigroup is leading the dollar transaction, while JPMorgan is lead bookrunner for the euro notes.
AI Spending Drives Debt Expansion
The financing underscores the enormous amount of capital being directed towards artificial intelligence.
SoftBank has positioned AI at the centre of its long-term investment strategy, with OpenAI representing one of its most significant commitments.
However, financing that strategy is also increasing leverage.
Fitch Ratings assigned a BB+ rating to the proposed notes and said SoftBank’s debt is expected to increase as the company funds its committed investments, although the rating agency expects the group to retain adequate liquidity and capital-market access.
The transaction demonstrates that the global AI investment race is increasingly extending beyond venture-capital and equity markets into large-scale corporate debt financing.
