SoftBank plans $6.29 billion corporate bond issuance amid AI fundraising boom
The issuance is SoftBank's largest ever and nearly twice the size of its previous record - a 600 billion yen offering issued in April 2025.
SoftBank is set to execute Japan's most substantial retail bond offering, aiming to secure approximately ¥1 trillion ($6.3 billion) to fuel its artificial intelligence ventures, including a significant commitment to OpenAI, according to Bloomberg. These seven-year bonds are anticipated to be issued on September 4, with an expected interest rate of between 4.3% and 4.9%.
Japan Credit Rating Agency is projected to bestow an A rating upon the securities. SoftBank's shares experienced a 5.3% decline to ¥4,975 in Tokyo post-announcement. This proposed issuance would mark SoftBank's third retail bond sale of the year, following successful fundraisers totaling ¥678 billion in the first half of 2023. The capital raised will primarily be utilized to refinance existing retail bonds maturing in September, with the remainder earmarked for expanding its AI investment portfolio.
SoftBank has pledged over $60 billion to OpenAI, intensifying its data center investments as part of its broader AI strategy. This aggressive push into AI technology comes as nations engage in a fierce competition to develop AI capabilities, although questions persist regarding the potential for profitability, oversupply, and mounting corporate debt.
The success of SoftBank's bond sale will largely hinge on Japanese retail investor participation, with analysts predicting the final coupon rate will likely hover near the upper threshold of the proposed range. Despite the bond issue, SoftBank might still face a funding shortfall of over $20 billion, possibly leading to additional offshore borrowing, according to analysts.
S&P Global Ratings downgraded SoftBank's outlook to stable from negative in July while maintaining its BB long-term issuer credit rating, which remains below investment grade. The fundraising effort unfolds amid a surge in AI expenditure among major tech conglomerates, with Alphabet, Amazon, Meta, and Microsoft collectively committing around $2.4 trillion towards AI-related investments over the next several years.
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