High-yield debt buyers are being asked to underwrite SoftBank’s next installment on OpenAI. The Japanese conglomerate plans to raise more than $11B through junk bonds, the Financial Times reported, citing investor documents.
Terms are due Thursday on tranches of $10B and EUR 1B. High-yield paper pays more and risks more, and the FT notes that large technology issuers have mostly chosen safer instruments this year.
The sale converts a bridge into a longer commitment. SoftBank had lined up short-term borrowing of up to $40B for the OpenAI stake and wants to replace that with longer-dated paper, which could carry the company above its own debt ceiling for a time.
Both sides of the ledger lean on each other. OpenAI is projected to spend nearly $280B in cash through 2030. SoftBank’s data center arm, meanwhile, is counting on OpenAI contracts to book revenue later.
