SoftBank Group has launched a bond sale of roughly $11bn, comprising $10bn in senior unsecured dollar notes and an additional €1bn in euros, according to term sheets reported separately by Reuters and Bloomberg on Monday.
The deal comes in five tranches, with dollar notes at three and a half, five and a half, and seven and a half years, and euro notes at four and six.
Pricing is set for 24 September and settlement for 29 September. Coupons have not been reported, and neither has final guidance. Citigroup and JPMorgan are leading the sale.
What the money is for rests on SoftBank’s own filings rather than on anyone’s term sheet. In a 27 February announcement, the company committed $30bn to OpenAI through Vision Fund 2 at a $730bn pre-money valuation, payable in three equal installments on 1 April, 1 July and 1 October.
SoftBank said at the time that the investment would be financed initially through bridge loans and later replaced by existing assets and other financing measures. This bond is that replacement, in the company’s own terms.
SoftBank said on 9 September that it had prepaid $25.9bn of the $30bn drawn against a $40bn facility arranged in March, leaving around $4.1bn outstanding. That repayment is what makes a fresh $11bn raise look like refinancing rather than escalation.
Pricing will be the thing to watch. SoftBank’s April notes came at 7.625% for three and a half years and 8.250% for five and a half years, and its 2031 dollar bond was yielding about 8.2% in September, up from 6.7% in January. S&P and Fitch both rate the group BB+, the top rung of speculative grade.
The contrast with the domestic market is stark. SoftBank’s record retail bond in Japan, priced on 4 September at 4.75%, is roughly 350 basis points below what offshore institutional investors are demanding for the same credit.
Around it sits a balance sheet under steady expansion. SoftBank widened a credit facility to $6.5bn on 18 September, sold its entire $5.8bn Nvidia stake and about $9.2bn of T-Mobile shares, and has pledged Arm against a $25bn margin loan.
Arm has not been sold, a distinction that is frequently lost. The group puts loan-to-value at 13% on its own method as of 30 June; S&P assessed it at 33%.
Cumulative investment in OpenAI reaches $64.6bn for a stake of about 13%, bought at a $730bn pre-money valuation. OpenAI is now discussing a private round at a considerably higher valuation. The final terms are due on 24 September.