SoftBank's Record-Breaking Bond Deal Reflects High Stakes in AI Investment

SoftBank Group is issuing one of the largest corporate high-yield bond offerings ever, seeking to raise over $11 billion in capital. The Japanese conglomerate plans to refinance a chunk of its $40 billion bridge facility and invest further into OpenAI. However, the cost of this privilege comes with a hefty price tag: yields between 9% and 10% on dollar-denominated tranches, which is record high for SoftBank.

The deal structure includes multiple tranches with maturities ranging from 3.5 to 7.5 years. The longest euro tranches are pricing in the mid-8% area, while the company carries a BB+ credit rating from S&P and Fitch.

This marks a significant increase from SoftBank's previous junk-bond deal in April, where it raised $3.6 billion with an 8.5% coupon on the 10-year dollar tranche. Early demand has been fierce, with over $20 billion in preliminary interest materializing from investors.