SoftBank plans record ¥1 trillion retail bond sale to fund AI investments

SoftBank Group plans to raise ¥1 trillion ($6.3 billion) from Japanese retail investors through a seven-year corporate bond offering, which would be the largest retail bond sale by a Japanese company. The yen-denominated notes carry an indicative coupon of 4.3% to 4.9%, are offered in ¥1 million denominations, and are expected to be priced on Sept. 4, subscribed from Sept. 7 to 16, issued on Sept. 17 and mature on Sept. 16, 2033. Proceeds will repay maturing 2019 bonds and fund AI investments, including OpenAI, one of SoftBank’s largest near-term funding needs. The sale is SoftBank’s third retail bond issue this year after ¥418 billion in April and ¥260 billion in June. SoftBank still owes a final $10 billion of a $30 billion additional OpenAI commitment in October, lifting cumulative OpenAI funding to about $64.6 billion and its stake to roughly 13%. Bloomberg Intelligence analyst Sharon Chen estimates SoftBank would still face a funding shortfall exceeding $20 billion afterward and may return to overseas bond markets. Coupons far exceed Japan’s roughly 2.13% five-year and 2.88% 10-year government yields. SoftBank expects an A rating from Japan Credit Rating Agency, while S&P Global Ratings maintains BB+, one notch below investment grade, a gap analysts say is pushing the group toward retail rather than bank funding.

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