SoftBank's $11 billion bond sale replaces a $10 billion OpenAI bridge loan

SoftBank Group opened the sale of about $11 billion of bonds on Monday to fund the next chunk of its stake in OpenAI.

A term sheet says the sale also cancels a $10 billion bridge loan facility it had secured earlier to fund the same wager.

Citigroup and JPMorgan line up five tranches for September 24 pricing

The deal splits into $10 billion of dollar-denominated senior unsecured notes and €1 billion of euro-denominated notes, five tranches in all.

Dollar maturities are 3.5, 5.5, and 7.5 years, and the euro notes have 4-year and 6-year terms, the term sheet showed.

The sale is run by Citigroup and JPMorgan. Pricing is set for September 24, with settlement for September 29.

The offering, with more than $11 billion in face value, would be among the biggest sales of junk bonds ever by a single company, not including distressed debt exchanges.

SoftBank has already sold close to $15 billion of bonds in multiple currencies this year, topping junk-rated corporate borrowers in 2026.

The proceeds will be used to cover SoftBank’s $10 billion payment for the third tranche of its follow-on investment in OpenAI, due to close October 1, with the rest going to general corporate purposes.

SoftBank had sought a $40 billion bridge loan in March to fund most of the OpenAI push, with four lenders, including JPMorgan, reportedly set to underwrite it, Cryptopolitan previously reported.

The new notes also cancel a $10 billion bridge facility SoftBank had lined up for the deal.

On September 9, SoftBank said it had prepaid the entire $25.9 billion outstanding on a $40 billion March facility, of which $30 billion had been drawn.

The pledge dates back to a February 27 announcement when SoftBank pledged $30 billion to OpenAI through Vision Fund 2 at a pre-money valuation of $730 billion. The payment is made in three equal installments on April 1, July 1, and October 1.

SoftBank said in February that bridge loans would fund the investment first and be replaced over time by existing assets and other financing measures.

2031 notes yield 8.2%, up from 6.7% in January

Yield on SoftBank’s dollar bond due 2031 surged to 8.2% this month from as low as 6.7% in January, and the cost of insuring SoftBank’s debt against default soared to a three-year high.

The group is rated at BB by S&P and Fitch, the highest notch of speculative grade. SoftBank’s April notes were priced at 7.625% for 3.5 years and 8.250% for 5.5 years.

It sold a record retail bond in Japan at 4.75% on September 4. That’s about 350 basis points cheaper than what offshore institutions now require for the same credit.

SoftBank has pledged close to $65 billion for a stake of about 13% in OpenAI. It was financed through loans and sales of assets.

A margin loan against Arm shares widened to $25 billion, and a credit line rose to $6.5 billion. SoftBank also dumped its entire stake in Nvidia and a large chunk of T-Mobile shares.

Apollo Global Management is also in talks to expand a loan to SoftBank. SoftBank acquired ABB’s industrial robotics business for $5.4 billion and data center private equity firm DigitalBridge for about $3 billion.

Its U.S. unit, SB Energy, is building 8.8 gigawatts of data-center capacity, estimated to need $174 billion in capital.

OpenAI Chief Executive Sam Altman said the company won’t go public this year, delaying the liquidity a listing would give SoftBank.

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