The Zhitong Finance App learned that SoftBank Group (SFTBY.US) finalized a 90 billion yen (equivalent to 550 million US dollars) bond issuance price for institutional investors on Wednesday. The move aims to broaden the company's domestic and foreign financing channels to finance its huge investment in artificial intelligence (AI).
According to the lead underwriter Daiwa Securities, this offering includes 80 billion yen three-year notes and 10 billion yen five-year notes. The three-year coupon interest rate is 3.270%, and the five-year coupon interest rate is 3.886%. Both set the record for the highest coupon interest among Japanese fixed term corporate bonds issued to institutional investors this year. In terms of pricing, the interest rate spread for the three-year model is 165 basis points compared to Japanese treasury bonds, while the five-year model is 190 basis points.
It was also revealed that the three-year portion of the initial plan to issue 50 billion yen was raised to 80 billion yen, reflecting that in an environment where interest rates are rising, investors prefer shorter term varieties.
Subscribers include institutions such as life insurance companies, investment advisors, trust banks, and local banks. The final subscription multiplier for the five-year product is about 1.2 times the distribution scale.
Currently, against the backdrop of continuing to rise in interest rates in Japan, investor demand is strong, and SoftBank is taking this opportunity to speed up the pace of financing.
As demand for financing continues to grow — particularly investment in US tech giant OpenAI — SoftBank is continuing to broaden its funding base. Founder and CEO Sun Zhengyi has publicly stated that he will “fully invest” in OpenAI. Currently, the promised investment amount has exceeded 60 billion US dollars. Among them, the $40 billion bridge loan raised to invest in OpenAI has attracted 21 new banks to participate in the broader syndication phase.
Previously, SoftBank had planned to use its OpenAI shares as collateral to raise at least 6 billion US dollars through margin loans, but related negotiations have stalled. Just a few weeks ago, the Japanese conglomerate lowered its initial funding target from $10 billion.
In addition to bank loans, SoftBank also issued subprime bonds to individual investors and issued US dollar and euro denominated bonds in overseas markets this year, fully demonstrating its strategic intention to raise capital from diverse investor groups and multiple markets.
Since this year, SoftBank has raised a total of 678 billion yen through subordinated bonds for individual investors. In April, the company also raised approximately 570 billion yen through the issuance of US dollar and Eurobonds.
Despite a significant rise in debt burden, S&P Global Ratings raised SoftBank's BB+ rating outlook from “negative” to “stable” this month. S&P said that the stock price of its subsidiary Arm (ARM.US) rose, providing support for the adjustment of the rating outlook.