SoftBank Group has completed the largest high-yield corporate bond sale in history, raising $11.1 billion across dollar and euro denominations to finance its substantial investment in OpenAI. This move makes SoftBank the world's biggest corporate junk-bond borrower, with the offering drawing significant demand that allowed for some yield reduction from initial ranges, yet still resulted in record-high borrowing costs for the company.
The dollar-denominated bonds totaled $10 billion, split into three tranches: $1 billion at a 3.5-year term with an 8.625% yield, $4.5 billion at 5.5 years with a 9.25% yield, and another $4.5 billion at 7.5 years yielding 9.75%. These yields represent the highest ever paid for SoftBank's dollar bonds, occurring as benchmark U.S. Treasury rates reached two-decade highs. Additionally, SoftBank issued $1.14 billion (€1 billion) in euro-denominated notes over four and six years, with the longer tranche yielding 8%, also a record for that tenor in euros.
SoftBank has committed approximately $64.6 billion to OpenAI, aiming to own about 13% of the ChatGPT maker. This aggressive investment strategy, led by Masayoshi Son, has driven the company to incur higher yields and a surge in the cost of insuring its debt against default. For instance, the five-year credit default swap spread for SoftBank exceeded 400 basis points this week, up from around 280 basis points in June.
The scale of this bond issuance, which surpassed Numericable Group's $10.9 billion issuance in 2014, has raised concerns among some bond investors about the increasing debt associated with AI funding. Global AI-related debt issuance has already topped $575 billion in 2026. Analysts like Mark Chapman from CreditSights highlight material risks for SoftBank's credit due to increased concentration and strain on cash flow, with Arm and OpenAI holdings now accounting for three-quarters of the group's asset value. Delays in the IPOs of OpenAI and SB Energy further underscore the financial pressures, although S&P Global Ratings noted that Arm's strong share price performance has partially supported SoftBank's creditworthiness.
