TLDR
- SoftBank has launched a bond sale worth more than $11 billion to help fund its investment in OpenAI.
- The offering includes $10 billion in dollar-denominated notes and €1 billion in euro-denominated bonds.
- Part of the proceeds will fund a $10 billion OpenAI payment expected on October 1.
- SoftBank plans to use the bond proceeds to replace an existing $10 billion bridge loan.
- Fitch assigned the proposed notes a BB+ rating.
SoftBank has launched a bond sale worth more than $11 billion as the Japanese investment group prepares another large payment tied to its OpenAI investment.
The company is offering $10 billion in dollar-denominated senior unsecured notes and €1 billion, about $1.15 billion, in euro-denominated bonds.
The proceeds are expected to help fund a $10 billion payment connected to the third tranche of SoftBank’s follow-on investment in OpenAI.
That payment is expected to close on October 1.
SoftBank Uses Bonds to Finance OpenAI Investment
The dollar-denominated notes are divided across maturities of 3.5 years, 5.5 years and 7.5 years.
The euro bonds are split between four-year and six-year maturities.
The offering is expected to be priced on September 24 and settle on September 29.
SoftBank had previously arranged a $10 billion bridge loan to finance its OpenAI commitment.
The new bond proceeds will be used to replace that facility, according to the term sheet.
Any remaining proceeds can be used for general corporate purposes.
If completed at the planned size, the deal would become the largest non-financial corporate bond offering in the Asia-Pacific and Japan region on record, according to LSEG data cited by Reuters.
It would also rank among the 20 largest corporate bond transactions globally this year.
Fitch Rates Proposed Notes BB+
Fitch Ratings assigned the planned notes a BB+ rating.
The ratings agency said SoftBank’s debt is expected to increase as the company finances committed investments.
However, Fitch said SoftBank should retain adequate liquidity and continued access to capital markets.
Citigroup is acting as lead bookrunner for the dollar-denominated bonds.
JPMorgan is the lead bookrunner for the euro portion.
Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley are joint global coordinators for the dollar notes.
JPMorgan, Deutsche Bank and Goldman Sachs are coordinating the euro issuance.
OpenAI Remains Central to SoftBank Strategy
OpenAI has become a major part of SoftBank CEO Masayoshi Son’s artificial intelligence strategy.
SoftBank has committed tens of billions of dollars to the AI company as it increases its exposure to generative AI and related infrastructure.
The latest financing highlights the amount of capital required to maintain that position.
OpenAI itself is also spending heavily on computing capacity and infrastructure as it expands its models and services.
That has increased the importance of large outside investors such as SoftBank.
The bond transaction also comes after OpenAI CEO Sam Altman said the company does not plan to complete an IPO in 2026.
That means SoftBank’s investment remains tied to a private company for now, rather than a near-term public listing.
SoftBank’s Vision Fund has already benefited from higher valuations across some of its AI holdings.
For now, the company is turning to global debt markets to finance the next stage of its OpenAI commitment, with the $10 billion payment scheduled for October 1.
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