SoftBank Group has mandated banks for a dual-currency debt issuance, targeting a combined $10bn and €1bn ($ 1.15bn) in senior unsecured notes.
The $10bn US dollar portion is structured across 3.5-year, 5.5-year, and 7.5-year tranches. Early pricing hints place the 3.5-year notes in the 9% to low-9% range, the 5.5-year notes in the mid-9% area, and the 7.5-year notes at high-9% to 10%, according to 9fin sources.
While the exact size split remains to be determined, market sources indicate the distribution will skew toward the 5.5-year and 7.5-year tenors, with the 3.5-year expected to be the smallest tranche.
Concurrently, the Japanese conglomerate is looking to raise €1bn through a European offering split into four-year and six-year notes. The notes are expected to be rated BB+ from both S&P and Fitch.
Proceeds will be used to fund a $10bn payment for the third tranche of the 2026 OpenAI follow-on investment, expected to close on 1 October 2026, and for general corporate purposes.
For the US dollar tranches, Citi is acting as the billing and delivery bank, joined by Goldman Sachs, JP Morgan, and Morgan Stanley as joint global coordinators. For the euro tranches, JP Morgan takes the B&D role alongside Deutsche Bank and Goldman Sachs as JGCs.
AI ambitions
The bond mandate follows an investor call where SoftBank management outlined AI infrastructure plans and provided updates on its capital structure.
The upcoming $10bn OpenAI payment is part of a $65bn total investment pipeline dedicated to the AI research firm, in which SoftBank currently holds a 13% stake, according to 9fin sources.
To support its AI ambitions, SoftBank is actively planning massive AI data centers globally, including an 8GW joint project with the government in Ohio, a 5GW site in France, and a facility in Texas. The management said the total funding sizes for these projects are still being finalized.
However, the sheer scale and speed of SoftBank's AI capital deployment has drawn caution from some buyside investors. With OpenAI's near-term profitability still uncertain, one portfolio manager called the concentrated, multi-billion-dollar commitment a "massive bet."
Liquidity headroom
On the balance sheet front, management revealed that the group repaid a $30bn bridge loan on 15 September using asset-backed financing, six months ahead of maturity.
The company’s loan-to-value ratio sits at a 13%, well below its internal 25% safety guideline for normal circumstances. Management believes this low leverage provides "good headroom" for ongoing operations, the sources said.
Should extraordinary events occur, potentially pushing the LTV toward the 35% extreme limit outlined by the company, SoftBank has prepared several contingency plans, including outright asset sales and additional asset-backed financing.
Regarding remaining collateral assets, the management team said SoftBank's 87% stake in Arm Holdings represents a total borrowing value of $200bn, of which $25bn has been drawn to date. Management is also open to pledging its OpenAI shares as collateral in the future, though none have been utilized at this stage.
The issuance comes as SoftBank ended last week with nearly $21bn in potential fresh borrowings to build out its AI financing capacity. The group recently expanded its Arm-backed margin loan by $5bn to $25bn while securing an additional $450m for an existing credit line.
