SoftBank Group is lining up one of the biggest ever issuance of junk bonds as it doubles down on a already hefty wager on OpenAI. The Japanese conglomerate is seeking over $11bn via dollar and euro bonds, people close to the matter said. About $10bn would be raised through dollar notes ranging over three maturities, while another one billion euros through two tenors and a billion euros. The proceeds will be used for a follow-on investment of 10 billion in the ChatGPT-infatuating company, due to close at the beginning of October.
The new round of fundraising follows a significant investment of nearly $65 billion earlier by SoftBank into OpenAI. The investment makes the tech giant one of the most significant outside investors in the company, with about 13 percent ownership. For SoftBank founder and CEO Masayoshi Son, this aggressive, debt-fueled bet on a revolutionary technology is not new. In the recent past, the success of AI has become so intertwined with the fortunes of SoftBank that it is now seeking to accumulate or monetize this stake in it.
The bond itself is set to come to market as early as Thursday, settling later in the month. Leading underwriters include some of the world’s largest global banks and underwriters, such as Citigroup and JPMorgan. SoftBank also sets the record as the world’s biggest junk-rated corporate borrower in bonds this year, having issued nearly $15 billion notes across currencies, and would be one of the largest outside of financials from Asia, placing quite high on the global list for 2026.
Investors will be noting the valuation carefully. SoftBank’s existing debt has become more expensive as bond yields have risen. For instance, returns on its bonds payable in 2031 have increased from 6.7% earlier in the year to 8.2%. Meanwhile, prices for protecting SoftBank debt from default have increased quite a bit. These high costs to borrow are a global trend and a reflection of the company’s concentrated risk through its huge exposure to AI at a time when industry executives and policy-makers have renewed concerns over safety and excess capital inflows.
Still, Son has shown little desire to ease up. SoftBank arranged a large bridge loan to fund the OpenAI investment and now plans to refinance that facility with longer-dated bonds. The approach preserves liquidity, while securing money for the next tranche of capital OpenAI will be able to draw. For SoftBank, it looks like a no-brainer: AI is the defining technology of the decade, and owning a major stake in one of its most ambitious corporations is worth the higher cost of finance.
The scale of the commitment also underscores the extent to which debt markets remain underwriting the AI boom. SoftBank’s guns-for-hire attracting the issuance of high-yield paper at this scale suggests the extent to which there is institutional investor demand for heeding the theme and that investors will pay for itand in fact, it concentrates risk. If OpenAI grows as Son predicts, it will be a shrewdly leveraged SoftBank.
