POLICY · MONEY · #747
SoftBank to issue $10bn and €1bn junk bonds to fund OpenAI stake
According to the Financial Times, SoftBank plans to borrow more than $11 billion from investors via high-yield (junk) bonds—$10 billion and €1 billion—to fund another payment for its stake in OpenAI; terms were expected to be set Thursday and the payment is due in October. The company also intends to swap previously arranged short-term loans (up to $40 billion) for longer-term debt, a move that could temporarily push it past its own debt ceiling, and the FT notes SoftBank’s data-center business is counting on OpenAI contracts for future revenue.
KEY POINTS
- According to the Financial Times, SoftBank plans to borrow more than $11 billion from investors via high-yield (junk) bonds—$10 billion and €1 billion—to fund another payment for its stake in OpenAI; terms were expected to be set Thursday and the payment is due in October.
- The company also intends to swap previously arranged short-term loans (up to $40 billion) for longer-term debt, a move that could temporarily push it past its own debt ceiling, and the FT notes SoftBank’s data-center business is counting on OpenAI contracts for future revenue.
- The deal signals a risky, large-scale funding step for SoftBank that could affect its balance sheet and the financing runway for OpenAI, with implications for the AI infrastructure market and investors.
WHY IT MATTERS
The deal signals a risky, large-scale funding step for SoftBank that could affect its balance sheet and the financing runway for OpenAI, with implications for the AI infrastructure market and investors.