SoftBank Issues $11.1 Billion in Bonds to Fund OpenAI Investment

TOKYO, September 24: Japan’s SoftBank Group has issued $11.1 billion in dollar- and euro-denominated bonds as it raises fresh capital to finance its expanding artificial intelligence investments, including the final portion of its previously announced commitment to OpenAI. The deal is set to become the largest high-yield bond sale by an Asia-Pacific issuer.

SoftBank Raises $11.1 Billion Through Bond Sale

According to a company filing reported by Reuters, SoftBank issued a combination of U.S. dollar and euro-denominated senior notes.

The dollar bond portion includes:

• $1 billion of 3.5-year notes carrying an 8.625% interest rate
• $4.5 billion of 5.5-year notes carrying a 9.25% rate
• $4.5 billion of 7.5-year notes carrying a 9.75% rate

SoftBank also issued two €500 million euro-denominated tranches with maturities of four and six years, carrying yields of 7.125% and 8%, respectively.

Funds to Support Final $10 Billion OpenAI Investment

A major portion of the proceeds will be used to fund the final $10 billion tranche of SoftBank’s $30 billion commitment to OpenAI.

Reuters reported that once that payment is completed, SoftBank’s total investment exposure to OpenAI will rise to about $64.6 billion.

The latest financing underscores SoftBank founder **Masayoshi Son’s aggressive strategy of placing artificial intelligence at the centre of the group’s future growth plans.

Bond Deal Could Set Asia-Pacific Record

The issuance is expected to become the largest high-yield bond offering by an issuer from the Asia-Pacific region.

SoftBank initially launched the financing earlier this week with plans to issue approximately $10 billion in dollar bonds and €1 billion in euro notes.

The scale of the sale highlights both the company’s capital needs and investors’ willingness to fund its growing AI ambitions despite comparatively high borrowing costs.

OpenAI Payment Expected to Close in October

SoftBank’s earlier financing documents indicated that the final OpenAI investment tranche is expected to close around October 1.

The bond proceeds are also intended to replace a $10 billion bridge loan previously arranged to support the investment.

Replacing short-term bridge financing with longer-dated bonds gives SoftBank more time to repay the debt while continuing to invest in artificial intelligence and related infrastructure.

SoftBank Has Raised Billions More in Debt This Month

The $11.1 billion bond deal follows another major fundraising exercise by SoftBank.

Earlier in September, the company issued approximately 1 trillion yen, or $6.32 billion, in corporate bonds aimed at retail investors.

SoftBank has also been exploring additional loans and financing structures to support its growing exposure to OpenAI and AI-related infrastructure projects.

High Interest Rates Reflect Borrowing Risk

The relatively high coupons on SoftBank’s latest notes reflect the risk investors attach to the company’s debt profile.

The dollar-denominated bonds carry interest rates reaching as high as 9.75%, while the euro notes offer yields of up to 8%.

Fitch Ratings had earlier assigned the proposed securities a BB+ rating, below investment grade, while noting that SoftBank still maintains significant liquidity and access to capital markets.

SoftBank Deepens AI Strategy

SoftBank has increasingly positioned itself as one of the world’s largest investors in artificial intelligence.

The group is already a major shareholder in semiconductor designer Arm Holdings and has continued building partnerships involving AI software, data centres and computing infrastructure.

SoftBank and OpenAI have also expanded their business collaboration in Japan, including plans to develop and distribute enterprise AI services.

OpenAI’s Capital Needs Continue to Rise

OpenAI itself is expected to require significant capital over the coming years as it expands computing capacity, data centres and development of advanced AI models.

Reuters recently reported, citing a Financial Times report based on company projections, that OpenAI could burn through nearly $278 billion in cash between 2026 and 2030 as spending on infrastructure and computing rises.

That level of investment helps explain why OpenAI has increasingly relied on large strategic investors and infrastructure partners.

SoftBank Bet Comes With Higher Financial Risk

SoftBank’s aggressive AI expansion also means the group is taking on more debt.

Bond investors and rating agencies are closely watching whether growth in SoftBank’s AI-related assets can keep pace with the additional borrowing needed to fund them.

The company has maintained that artificial intelligence represents a transformational long-term opportunity, while the latest bond deal shows just how much capital SoftBank is prepared to commit to that strategy.

source – Reuters / SoftBank Group

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