SoftBank Expands Credit Facility to $6.5 Billion as AI Debt Continues to Pile Up
nashnova research
SoftBank expanded a revolving credit facility from roughly $6.05 billion to $6.5 billion to backstop its AI investment spree; combined with hundreds of billions in loans already closed and a junk-bond deal being shopped, the company is stacking debt at an extraordinary pace.
How much bigger is this credit line, and on what terms?
SoftBank added $450 million to an existing revolving credit facility, lifting it from roughly $6.05 billion to $6.5 billion. The old facility expired this month; the new one runs for an additional year.
The deal involves more than 20 banks and is priced at SOFR — the secured overnight financing rate, the most widely used short-term borrowing benchmark in U.S. markets — plus 210 basis points.
This means → for every $100 million drawn, SoftBank pays roughly $2.1 million a year above the benchmark — a meaningful premium that signals banks are demanding extra compensation for the risk.
A revolving credit facility — essentially a standby pool of cash a company can tap and repay at will — is typically held as a liquidity backstop. Whether SoftBank has drawn on this line is unclear.
How much has SoftBank actually borrowed recently?
A $11.87 billion term loan is done. A $10 billion loan collateralised by OpenAI equity is also in place.
Earlier this year SoftBank signed a $40 billion bridge loan — short-term emergency borrowing used to tide a deal over until longer-term financing arrives — to fund its OpenAI investment. It drew $30 billion and repaid the full $25.9 billion outstanding balance this week.
In plain terms = a bridge loan works like swiping a credit card before your paycheck clears — SoftBank borrowed short to close the deal, then replaced it with longer-dated funding.
The remaining $10 billion can be drawn as early as October, but the company has given no clear guidance.
What other financing is in the pipeline?
Apollo Global Management is in talks with SoftBank to expand a loan from $5.4 billion to $9 billion, also earmarked for the OpenAI investment.
SoftBank has also increased a margin loan — borrowing against shares, where a stock-price drop can trigger a call for additional collateral — secured by its stake in chip-design firm Arm Holdings, adding $5 billion to bring the total to $25 billion.
This means → SoftBank is pledging virtually every high-value asset it holds — OpenAI equity, Arm stock — as collateral, and the room for further unencumbered borrowing is shrinking fast.
What is the junk-bond deal about?
SoftBank met fixed-income investors in New York this week to gauge appetite for a junk-bond issuance — bonds rated below investment grade that carry higher yields and higher risk — potentially sized at $10 billion to $20 billion, with a launch as soon as next week.
SoftBank said the meetings were held "on a non-deal basis to provide updates" and that "bond issuance has not been decided."
This reflects a shift: SoftBank appears to be reaching a ceiling on bank lending and is turning to the public bond market to tap a broader investor base.
How is the market pricing this debt?
SoftBank's credit-default swaps — CDS, an instrument that functions like insurance on debt; a rising price signals growing concern about default — hit a three-year high earlier this week.
This means → the market is already marking up the risk premium on SoftBank's leveraged AI bet, and borrowing costs are climbing.
Founder Masayoshi Son has pledged nearly $65 billion to OpenAI, targeting completion by October. Yet OpenAI CEO Sam Altman has said the company will not pursue an IPO this year, removing one near-term path for SoftBank to recoup capital.
In plain terms = whether SoftBank's debt structure holds up comes down to one question: can the valuation of its core AI assets — OpenAI above all — rise faster than the cost of all this borrowing?
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