SoftBank prices $11.1 billion bond sale to fund OpenAI investment

SoftBank announced the terms Thursday for a debt offering totaling JPY1.763 trillion, or USD11.1 billion, with part of the proceeds intended to fund its artificial-intelligence investments. [3] The Tokyo-based investment firm expects its stake in OpenAI, the San Francisco company behind ChatGPT, to reach about 13% by October. [3] CNBC reported that SoftBank shares jumped more than 7% after the bond issuance for its OpenAI investment. [2]

The dollar offering comprises a USD1 billion note due in April 2030 at 8.625%, plus two USD4.5 billion notes due in April 2032 and April 2034 at 9.25% and 9.75%, respectively. [3] SoftBank will also issue two EUR500 million notes, carrying rates of 7.125% for the October 2030 maturity and 8.0% for the October 2032 maturity. [3]

Proceeds are allocated to the USD10 billion third and final tranche of SoftBank's USD30 billion follow-on OpenAI investment announced in February, as well as general corporate purposes. [3] SoftBank also expects to cancel the remaining USD10 billion available under a USD40 billion bridge facility agreement entered into in March. [3]

The bond terms turn SoftBank’s planned OpenAI payment into a concrete cost-of-capital decision: dollar coupons range from 8.625% to 9.75%, while euro coupons range from 7.125% to 8.0%. [3] The maturity ladder spreads repayment dates from 2030 through 2034, but the stated use of proceeds ties the issuance directly to the final $10 billion tranche. Canceling the unused bridge capacity would also replace temporary financing with issued debt. What the sources don't address: how SoftBank expects its OpenAI stake to generate returns sufficient to outweigh these borrowing costs.