SoftBank Launches $10 Billion and €1 Billion Bond Sale to Fund Third OpenAI Tranche

SoftBank Group Corp has launched a sale of $10 billion in dollar-denominated senior unsecured notes alongside €1 billion of euro-denominated notes, a combined package worth more than $11 billion, according to a term sheet cited by WTVB. Proceeds are earmarked mainly to fund SoftBank's $10 billion payment for the third tranche of its follow-on investment in OpenAI, a transaction expected to close on October 1, with any remainder going toward general corporate purposes, the term sheet said.

Deal Terms and Structure

The dollar notes are split into three maturities of 3.5 years, 5.5 years and 7.5 years, while the euro notes are divided into 4-year and 6-year tranches, according to the term sheet reported by WTVB and separately described by Asia Business Outlook. Citigroup is serving as lead bookrunner on the dollar notes and JPMorgan on the euro notes. Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley are joint global coordinators for the dollar tranche, while JPMorgan, Deutsche Bank and Goldman Sachs hold that role on the euro side, per the term sheet cited by WTVB. The new notes will cancel a $10 billion bridge loan facility SoftBank had earlier secured for the same OpenAI payment, the term sheet showed, according to WTVB.

If completed at the planned size, the offering would be the largest Asia Pacific and Japan non-financial corporate bond deal on record, surpassing 7-Eleven Inc's $10.93 billion sale in January 2021, based on LSEG data cited by WTVB, and would rank among the 20 biggest corporate bond deals globally so far this year, according to Dealogic data referenced in the same report. Bloomberg, citing people familiar with the matter, described the raise as one of the biggest junk bond deals ever, according to the Japan Times, and separately reported via Business Standard that a transaction of this size would rank among the largest junk bond sales by a single company, excluding distressed debt exchanges.

Ratings and Credit Backdrop

Fitch Ratings assigned the proposed notes a BB+ rating, WTVB reported. Fitch said in a note that it expects SoftBank's debt to rise as the company funds committed investments, but added that SoftBank should retain adequate liquidity and continued access to capital markets. Read as interpretation of those two points, the deal represents an expansion of leverage from a position Fitch still describes as adequately liquid rather than distressed — though the BB+ rating itself sits below investment grade, consistent with the junk-bond characterization used by Bloomberg and reported by the Japan Times.

Funding the $30 Billion OpenAI Commitment

SoftBank announced in February that it would invest a further $30 billion in OpenAI through SoftBank Vision Fund 2, split into three $10 billion installments, with the final tranche scheduled for October, according to Asia Business Outlook. Once that investment is completed, SoftBank's total commitment to OpenAI is expected to reach $64.6 billion, giving it an expected ownership stake of around 13%, the outlet reported, a figure the Japan Times noted has left SoftBank's fortunes increasingly tied to its ability to monetize the OpenAI holding.

SoftBank had entered a separate $40 billion bridge loan in March to fund an additional OpenAI investment and has since repaid the outstanding $25.9 billion balance on that facility, Business Standard reported, citing Bloomberg. SoftBank has also explored other routes to fund the OpenAI commitment, including loans backed by its stake in the AI company, Asia Business Outlook reported. OpenAI Chief Executive Sam Altman has said the company will not go public this year, a decision Bloomberg said investors are watching closely, since a public listing would give SoftBank greater liquidity on its holding, according to Business Standard.

Wider AI Financing Push

The bond sale sits alongside a broader run of borrowing tied to SoftBank's artificial intelligence buildout. Business Standard, citing Bloomberg, reported that SoftBank raised its Arm-backed margin loan by $5 billion to $25 billion and added $450 million to an existing credit line, taking that facility to $6.5 billion. Apollo Global Management is separately in talks to increase a loan to SoftBank by $3.6 billion to $9 billion, and SoftBank secured an $11.87 billion loan for the same purpose, according to people familiar with the deals cited by Bloomberg. Together, Bloomberg said, these transactions amount to about $20.92 billion in committed and potential new debt tied to SoftBank's AI push.

The Arm margin loan itself has grown steadily: from $8.5 billion in 2023 to $13.5 billion in 2024, $20 billion last year and $25 billion this month, per Bloomberg figures cited by Business Standard. As of May the facility was secured by 769 million Arm shares, representing a 72% stake in the chip designer, according to company filings cited by Business Standard, with $20 billion drawn as of December and the loan due to expire in September 2027. Lender demand for the expanded facility ran to about $7 billion, compared with SoftBank's initial plan to raise $3 billion to $5 billion, Bloomberg reported.

SoftBank's capital needs extend beyond OpenAI. The company has acquired ABB's industrial robotics business for $5.4 billion and data-centre-focused private equity firm DigitalBridge Group for about $3 billion in cash, Business Standard reported, and is replacing some shorter-term borrowing with longer-maturity debt. Its US unit SB Energy is developing 8.8 gigawatts of data center capacity across the US that is estimated to require $174 billion in capital spending, and SoftBank has also announced plans for a 5-gigawatt data center in France, the same report said. SoftBank has sold almost $15 billion of bonds across currencies in 2026, making it the largest junk-rated corporate borrower in bond markets so far this year, according to data compiled by Bloomberg, and it also secured a $10 billion two-year loan last month using its OpenAI stake as collateral, with Apollo among the lenders.

Market Reaction to Rising Debt

SoftBank's borrowing costs have climbed as the company has layered on debt. The yield on its dollar bond maturing in 2031 rose to 8.2% earlier this month from as low as 6.7% in January, Business Standard reported, citing Bloomberg data showing spreads widening alongside higher underlying US Treasury yields. The cost of insuring SoftBank's debt against default has also risen to its highest level in three years, according to Bloomberg. Before the launch, SoftBank said it had been meeting investors in New York on a non-deal basis: "We have investor meetings to provide an update in New York on a non-deal basis. Nothing has been determined on bond issuance," the company said, per Business Standard. SoftBank said it had no comment on the term sheet, WTVB reported, and could not be immediately reached for comment on Monday because of a public holiday in Japan.

Bottom Line

SoftBank's dollar-and-euro bond sale is intended mainly to fund the third $10 billion installment of the $30 billion OpenAI commitment it announced in February — the final tranche of that plan, scheduled for October — while cancelling the $10 billion bridge loan it had earlier secured for the same payment, according to the term sheet cited by WTVB. Taken together with the enlarged Arm margin loan, the Apollo talks and the other facilities reported by Bloomberg via Business Standard, the roughly $20.92 billion of committed and potential new debt shows how heavily SoftBank's near-term balance sheet is being shaped by its AI bets. Interpreting the market signals: Fitch's below-investment-grade BB+ rating, the rise in the 2031 bond yield to 8.2% from 6.7% in January and three-year highs in default-insurance costs are consistent with investors pricing in higher leverage, even as Fitch says the company should retain adequate liquidity and capital markets access.