SoftBank Launches Over $10 Billion Bond Sale to Fund OpenAI Investment

SoftBank Group Corp. has launched a multi-currency bond sale to raise over $10 billion to finance its significant follow-on investment in artificial intelligence leader OpenAI, according to a term sheet reviewed by Reuters on Monday.

Details of the Offering

The debt issuance consists of senior unsecured notes denominated in both U.S. dollars and euros, structured across several maturities to appeal to a range of investors. The offering is expected to price on September 24 and settle on September 29.

• U.S. Dollar Tranches: $10 billion split into 3.5-year, 5.5-year, and 7.5-year tenors.
• Euro Tranches: €1 billion split into 4-year and 6-year tenors.

Funding a Major AI Bet

Proceeds are primarily earmarked to fund a $10 billion payment for the third tranche of SoftBank's investment in OpenAI, which is scheduled to close on October 1, the term sheet stated. The funds will also be used for general corporate purposes.

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This new bond issuance will replace a $10 billion bridge loan facility that SoftBank had previously secured for the investment. By issuing long-term bonds, the company is replacing short-term financing with a more permanent capital structure, a standard corporate finance practice for major acquisitions and investments.

Market Context

The transaction highlights SoftBank's continued strategic pivot towards artificial intelligence, with its stake in OpenAI representing a cornerstone of this strategy. Citigroup and JPMorgan are serving as the lead bookrunners for the deal, according to the term sheet.

SoftBank could not be immediately reached for comment as the announcement was made on a public holiday in Japan.