SoftBank markets jumbo AI bonds at record yields

SoftBank Group has begun marketing bonds totaling over $12 billion at record yields for comparable maturities, as the investment firm diverts more funds to finance its rapid expansion into artificial intelligence. The Tokyo-based company seeks $10 billion through three U.S. dollar tranches and €1 billion through two euro tranches.

Preliminary price discussions suggest yields ranging from 8.75% to 9.875% for the dollar bonds, with longer-term securities offering higher returns. These yields would surpass SoftBank's previous highest levels for similar maturities if finalized. The offering could set a record as the largest non-financial corporate bond transaction in the Asia-Pacific and Japan region upon completion.

Proceeds will primarily finance a $10 billion commitment to SoftBank's investment in OpenAI, along with supporting general corporate needs. The financing is part of Masayoshi Son's strategy to increase SoftBank's exposure to AI companies and infrastructure, with the firm having pledged nearly $65 billion to OpenAI and related AI ventures.

The new bonds aim to replace a separate $10 billion bridge loan connected to the OpenAI investment, shifting from shorter-term bank financing to longer-dated capital-market debt. This transition reduces refinancing pressure but locks in higher borrowing costs compared to previous SoftBank bond issues. The proposed foreign-currency notes have been assigned a BB+ rating by Fitch Ratings, indicating they are just above investment grade.

Credit investors are becoming more selective about AI-related debt, and SoftBank's proposed borrowing costs are now higher than broader high-yield benchmarks for similar-rated securities.