SoftBank Sells $3.6 Billion in Junk Bonds at Record 8.5% Coupon as AI Debt Load Grows
Summary
SoftBank Group sold approximately $3.6 billion in high-yield bonds on April 15, with its 10-year dollar tranche carrying an 8.5% coupon — the highest the Japanese conglomerate has ever paid in dollar-denominated debt — as mounting AI-related borrowing drives up the firm’s funding costs.
The issuance comprised $1.5 billion in dollar notes and €1.75 billion ($2.1 billion) in euro-denominated bonds. It lands in a market still digesting SoftBank’s accelerating debt trajectory: an additional $30 billion stake in OpenAI funded by borrowing, plus a $40 billion bank loan consortium signed last month to be repaid partly through asset sales. S&P Global Ratings downgraded SoftBank’s outlook to negative from stable in March, citing risks to liquidity and credit quality from concentrated AI bets.
The sale came during elevated market volatility linked to the US-Iran conflict, though dollar junk bond yields have retreated nearly a full percentage point from last month’s peak to 6.81%. SoftBank’s own credit default swaps have widened to the highest level among Japanese firms since November, while its shares have fallen roughly 35% over the same period.
This is SoftBank’s third bond sale in weeks, following a €1.2 billion euro offering and ¥418 billion ($2.6 billion) in subordinated retail bonds at a record 4.97% yen coupon. The pace of issuance underscores the tension at the core of Masayoshi Son’s strategy: the AI portfolio’s long-term upside is being financed at increasingly punitive short-term rates, compressing the margin for error if returns on OpenAI and related investments are delayed.
CreditSights maintained an outperform recommendation on SoftBank notes, noting underlying asset value remains strong despite the balance sheet strain.