SoftBank Launches $11 Billion Bond Sale with Yields Near 10% to Fund OpenAI Investment

SoftBank Group is set to raise over $11 billion through one of the largest high-yield bond offerings in corporate history. The company aims to secure yields between 9% and 10% on dollar-denominated tranches, marking a notable increase in borrowing costs as it seeks to finance its substantial investment in OpenAI.

The bond offering, launched on September 21, includes $10 billion in dollar-denominated notes with maturities ranging from 3.5 to 7.5 years, alongside approximately €1 billion in euro-denominated notes. The euro tranches are expected to yield in the mid-8% area. This new deal surpasses SoftBank's previous record set in April 2026, when it raised $3.6 billion with an 8.5% coupon on a 10-year tranche.

SoftBank's bond proceeds will serve two primary purposes: refinancing a portion of its $40 billion bridge facility, which was initially arranged to fund its investment in OpenAI, and providing longer-duration debt to support ongoing AI expenditures. The company has committed nearly $65 billion to OpenAI, aiming for a 13% equity stake in the AI firm.

The demand for the bond offering has been robust, with preliminary interest exceeding $20 billion, nearly double the amount SoftBank is looking to raise. The urgency of the capital raise is underscored by the impending deadline for the next tranche of investment in OpenAI, set to close on October 1.

SoftBank's willingness to pay record yields indicates a calculated risk, betting that the returns from AI investments will outweigh the high costs of capital. However, this strategy also highlights the competitive landscape, as companies with access to cheaper capital, like Microsoft and Alphabet, may hold an advantage in the AI race.