SoftBank Group launched more than $11 billion of high-yield bonds on September 21 to fund a $10 billion OpenAI payment due October 1, turning a private AI commitment into one of the larger junk deals of the year and a test of how much AI duration credit investors will buy after a rate hike.
Term sheets showed $10 billion of dollar senior unsecured notes in 3.5-year, 5.5-year, and 7.5-year tenors, plus €1 billion of euro notes in four- and six-year tenors. Pricing is expected around September 24, with settlement on September 29. Citigroup and JPMorgan are lead bookrunners. Proceeds cover the third $10 billion tranche of a $30 billion follow-on, cancel a $10 billion bridge loan, and support general corporate purposes. SoftBank's broader OpenAI-related commitment is about $65 billion, for an expected stake near 13 percent. Fitch rates the paper BB+, the top rung of junk.
The choice of market is the story. Masayoshi Son is not trimming the bet and is not paying with equity. He is terming out bank bridge risk in the same week U.S. 10-year yields have been near 5 percent and the Fed has delivered its first hike in three years. That asks high-yield accounts to finance the cash-flow timing of a private model company whose own revenue does not service the notes.
If the bonds price tight, the AI trade still has a bid in credit. If they cheapen, the cost of keeping the largest private AI checks in the market will show up in the spread — and in how many more Japanese conglomerate IOUs the Street will take before OpenAI's capital stack looks like a rate problem.
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