SoftBank is seeking a two-year $10 billion loan, with Mizuho Bank acting as mandated lead arranger and bookrunner.
Part of the proceeds could be used to repay a $40 billion bridge loan secured earlier this year for OpenAI investments.
The financing comes as SoftBank lines up multiple debt and bond deals to fund its planned investment in OpenAI.
SoftBank’s OpenAI Bet Triggers Fresh $10 Bn Funding Push
SoftBank is seeking a fresh $10 billion loan as it looks to raise more funds to refinance debt tied to its investment in OpenAI
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SoftBank Group is seeking a $10 billion loan as it looks for additional funding to refinance debt used for its investment in US artificial intelligence (AI) company OpenAI, according to a Bloomberg report.
The proposed two-year facility would carry an interest margin of around 275 basis points over the Secured Overnight Financing Rate (SOFR), people familiar with the matter told the news agency. Mizuho Bank has been appointed as the mandated lead arranger and bookrunner.
The latest financing adds to SoftBank’s growing list of debt-raising plans linked to its OpenAI investment. The Japanese technology conglomerate, led by billionaire Masayoshi Son, is slated to invest close to $65 billion in OpenAI by October, according to the report.
SoftBank May Use Loan To Repay $40 Bn Bridge Debt
According to the report, proceeds from the proposed loan could partly be used to repay a $40 billion bridge loan that SoftBank secured earlier this year for its OpenAI investments.
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Commitments for the new loan are due on August 31, while banks are already in discussions to join the financing. The International Financing Review had reported the deal earlier this week.
SoftBank is also considering raising additional money through the bond market. The company is weighing a $10 billion to $20 billion bond offering that could help refinance the bridge loan.
More Debt Plans To Fund OpenAI Investment
SoftBank is separately planning a record ¥1 trillion ($6.3 billion) retail bond sale in Japan to support its investment commitments to OpenAI. The company had also secured a $10 billion loan earlier this month backed by its OpenAI stake.
That loan includes covenants that could require SoftBank to provide additional cash or repay the facility early, according to the report.
SoftBank’s financing activity comes as technology companies ramp up spending on AI infrastructure. According to data compiled by Bloomberg News, companies have borrowed more than $410 billion this year through bond markets for data centres and other AI-related investments.
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The rising borrowing comes as the AI industry faces growing questions around the scale of investment and credit risks. SoftBank, meanwhile, continues to build its exposure to OpenAI while arranging multiple sources of financing for its planned investment.