SoftBank Issues ¥90 Billion in Bonds with Highest Coupon Rate This Year
Alina Collins
SoftBank priced ¥90 billion in institutional bonds to fund its AI push, with both tranches setting Japan's highest same-tenor coupon records this year. This means → the market is willing to bankroll SoftBank's AI bet, but at the steepest borrowing cost in Japan's corporate bond market.
Why is this bond so expensive?
The deal has two tranches: ¥80 billion three-year notes at 3.270% and ¥10 billion five-year notes at 3.886%.
This means → both coupons are the highest on record for same-tenor institutional corporate bonds in Japan this year. SoftBank is paying more than any peer.
The three-year tranche priced at 165 basis points over Japanese government bonds; the five-year at 190 bps. In plain terms = basis points measure interest-rate gaps — 1 bp equals 0.01% — and wider spreads signal higher perceived risk.
Why did the three-year tranche sell better?
The three-year was originally planned at ¥50 billion but upsized to ¥80 billion on strong demand.
In plain terms = with Japanese rates rising, institutions prefer shorter lock-up periods — less interest-rate risk.
The five-year tranche drew a subscription ratio of roughly 1.2× — just enough to clear. Buyers included life insurers, trust banks, and regional banks.
Where does the money go?
Proceeds fund SoftBank's ongoing AI investments, with OpenAI as the centerpiece.
Founder Masayoshi Son has publicly pledged to go "all in" on OpenAI, with commitments exceeding $60 billion.
This means → ¥90 billion is one piece of a much larger funding puzzle — nowhere near enough to cover SoftBank's total AI commitment.
Where else is SoftBank raising money?
A $40 billion bridge loan for the OpenAI investment has attracted 21 new banks into the syndicate.
A planned margin loan of at least $6 billion, backed by SoftBank's OpenAI stake, has stalled; the target was already cut from $10 billion.
This year SoftBank also raised ¥678 billion in subordinated bonds sold to retail investors and roughly ¥570 billion through dollar- and euro-denominated bonds in April.
Can a rating-outlook upgrade offset ballooning debt?
S&P this month revised SoftBank's BB+ outlook from "negative" to "stable," citing a rally in subsidiary ARM's share price.
In plain terms = BB+ is still speculative grade — below investment grade. The upgrade only means S&P moved from "might downgrade" to "holding steady for now."
This reflects SoftBank's balancing act: multi-currency, multi-market fundraising on one side, a rating that just escaped negative territory on the other. Whether the funding chain holds depends on both the pace of future fundraising and whether AI asset valuations deliver.
Content is for reference only, not financial advice.