SoftBank launches 10 billion dollars and 1 billion euros of bonds for OpenAI
SoftBank launched sales of 10 billion dollars and 1 billion euros of unsecured bonds to finance its OpenAI investment. The dollar debt is split across three maturities and the euro debt across two, with pricing expected on 24 September. At the planned size, the transaction would be the largest non-financial corporate bond deal ever completed in Asia-Pacific and Japan.
Economics & Markets··Midday
A sale in two currencies
SoftBank launched sales of 10 billion dollars and 1 billion euros of senior unsecured bonds to finance its OpenAI investment. The dollar notes are divided into maturities of three and a half, five and a half, and seven and a half years; the euro notes have four-year and six-year maturities. Two independent reports say the sale is intended to provide new financing for OpenAI. The company is therefore spreading the borrowing across five tranches rather than one maturity.[1], [2]
A deal approaching an unprecedented scale
Pricing is expected on 24 September, followed by settlement on 29 September. According to the term sheet reported by Reuters, a sale at the full planned size would become the largest non-financial corporate bond transaction in Asia-Pacific and Japan, surpassing the previous regional high. Because the bonds have not yet been priced, the comparison with the previous regional high rests on the target amount; the completed sale total will be known after pricing and settlement.[2]
The borrowing cost behind the OpenAI commitment
Cinco Días says SoftBank's total commitment to OpenAI has reached about 65 billion dollars. The yield on its existing 2031 bond rose from 6.7 per cent in January to 8.2 per cent in early September. The new sale raises money for that large investment, while the current borrowing follows an observed rise in the existing bond's yield since January.[1]
