SoftBank mulls $20B bond sale for OpenAI financing

SoftBank Group Corp. is considering a bond sale ranging from $10 billion to $20 billion to help refinance a loan related to its investment in US tech company OpenAI, according to sources familiar with the matter. The bond could be issued in both dollars and euros and is expected to be announced as early as September. The funds raised would be used to pay off a $40 billion bridge loan obtained earlier this year for the OpenAI investment.

SoftBank, led by Masayoshi Son, plans to invest nearly $65 billion in OpenAI by October, partly funded by loans. The firm is also exploring a 144A format, which would allow the sale to be offered to US institutional investors, potentially increasing demand for the offering. If the bond sale reaches its maximum target, it would be the largest Asian-led deal this year and the second for SoftBank this year in the offshore bond market.

SoftBank is also planning a record ¥1 trillion ($6.3 billion) retail bond sale in Japan early next month and has secured a $10 billion margin loan backed by its OpenAI stake. Despite concerns about credit risks and the potential for these investments to not pay off, companies are increasingly turning to junk bond investors for AI-related funding as competition for capital heats up.

US tech firms are also planning to invest significant amounts in AI infrastructure in the coming years, with more than $410 billion borrowed in the bond markets so far this year for such facilities and AI investments.