SoftBank's Bond Bet Faces Repricing Risks Amid AI Financing Concerns
SoftBank's share price has taken a hit in recent days, plummeting by around 5.4 to 5.9 percent in a single session, with the Nikkei 225 index off by 3.2 percent.
The tech sell-off in Japan triggered this decline, coming at a particularly bad time for the company as it prepares to issue its largest retail corporate bond ever in Japan - a ¥1 trillion ($6.3 billion) seven-year maturity bond aimed at individual investors.
The bond is part of SoftBank's massive AI build-out, which has raised concerns about debt-fueled financing and the valuation of assets like Arm Holdings, now accounting for 60 percent of the group's total asset value.
SoftBank needs this fresh capital to keep its AI ambitions funded, but raising funds in today's market means paying a premium. The ten-year Japanese government bond yields near 3 percent, the highest since 1996, and the yen hovers around 159 to the dollar.