SoftBank raising US$11.1 billion in world’s biggest high-yield corporate bond sale
Heavy debt issuance is aimed at funding OpenAI stake and other AI bets
SoftBank Group, the heavy debt-issuing tech investor, is preparing to issue US$11.1 billion in high-yield corporate bonds, marking the largest such sale globally on record. This move aims to fund its significant investments in OpenAI and other AI-related ventures. Following a previous bond issuance of one trillion yen for retail investors, the latest sale could intensify scrutiny over SoftBank's financial health, particularly if sentiment towards OpenAI and the AI sector declines.
Led by CEO Masayoshi Son, SoftBank has committed US$64.6 billion to OpenAI, owning roughly 13 percent of the company. Additionally, the conglomerate is acquiring ABB's robotics business for US$5.4 billion and DigitalBridge for US$3.1 billion. Due to the sheer scale of its AI-related investments, SoftBank has opted for higher yields to finance these endeavors, resulting in increased costs for insuring its debt against potential default.
Despite this, the issuance is anticipated to proceed smoothly, as indicated by Satoru Aoyama, senior director at Fitch Ratings, who noted a positive response from the market.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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