Apollo weighs expanding SoftBank’s Vision Fund loan to $9bn
Apollo Global Management is in discussions with SoftBank Group over a potential increase in a loan backed by assets held in the Japanese conglomerate’s Vision Fund 2, as SoftBank seeks additional financing for its substantial investment in OpenAI, according to a report by Bloomberg.
Apollo Global Management is reportedly in talks with SoftBank Group regarding a potential expansion of a loan backed by assets in SoftBank's Vision Fund 2. The proposed loan could rise to $9 billion from its current $5.4 billion, according to sources familiar with the matter. This increase would be finalized only if the discussions yield a revised agreement.
Apollo originally provided the loan to Vision Fund 2 in 2021, expanding it by $900 million last year to reach the current amount. The facility enables private capital managers and investment funds to raise liquidity against the value of their underlying portfolios. SoftBank's expansion of the loan would provide an additional funding source as it commits larger sums to AI investments, particularly in OpenAI, the creator of ChatGPT.
The conglomerate has committed about $64.6 billion to the AI company and is exploring further borrowing against its OpenAI holdings. In August, SoftBank secured a $10 billion margin loan backed by its stake in OpenAI from a group of lenders, including Apollo. The scale of SoftBank's AI spending has heightened scrutiny of its financing requirements and credit profile, with credit-default swaps on the conglomerate reaching a three-year high this week, reflecting investor concerns over its exposure to OpenAI and broader AI-related risks.
SoftBank has also discussed a potential overseas high-yield bond offering with investors in New York, which could raise between $10 billion and $20 billion.
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