A SoftBank set on Thursday (24) the terms of an issuance of US$ 11.1 billion in debt securities to finance the final installment of its new investment in OpenAI. The securities were rated BB+, within speculative grade, and are coming to market as the Japanese group also expands its borrowing capacity using Arm shares as collateral.
The deal includes US$ 10 billion in dollar-denominated bonds and €1 billion in euro-denominated bonds. The three dollar tranches mature in 2030, 2032 and 2034 and pay annual interest of 8.625%, 9.25% and 9.75%, respectively. The two euro tranches offer rates of 7.125% and 8%. The issuance is expected to be completed on September 29.
Most of the proceeds will go toward paying the third and final installment of US$ 10 billion of the additional US$ 30 billion investment SoftBank agreed with OpenAI in February. The disbursement is scheduled for October 1.
With the completion of this stage, SoftBank's cumulative investment in the ChatGPT developer is expected to reach US$ 64.6 billion, equivalent to a stake of approximately 13%, according to an estimate disclosed by the group itself.
Arm becomes a key piece in the financing structure
Alongside the bond sale, SoftBank this month expanded from US$ 20 billion to US$ 25 billion a loan line secured by Arm shares, according to people familiar with the transaction who spoke to Bloomberg. It was the third expansion of this financing, used by the conglomerate to increase its capacity to invest in artificial intelligence.
The two transactions are separate. The new US$ 11.1 billion bonds are senior unsecured debt, while Arm shares serve as collateral for the US$ 25 billion line. The structure allows SoftBank to raise funds against the value of portfolio assets without necessarily having to sell them.
The company had already arranged in March a bridge line of up to US$ 40 billion, mainly to finance the contributions to OpenAI. Of the US$ 30 billion actually drawn, SoftBank announced the early repayment of the US$ 25.9 billion that was still outstanding in September. With the new issuance, the group also intends to cancel the remaining US$ 10 billion of unused capacity under that line.
The strategy is aligned with the financial plan presented by SoftBank itself to finance its AI expansion. The group says it prioritizes loans backed by assets such as Arm before selling stakes considered strategic, thus preserving its exposure to potential future appreciation of those investments.
