SoftBank raises $11.1B via bonds to fund OpenAI investment
What's the story
SoftBank Group has raised $11.1 billion through dollar and euro-denominated bonds. The move comes as part of its strategy to generate cash for further investments in artificial intelligence (AI). The funds will be used to finance the last $10 billion tranche of SoftBank's total $30 billion commitment to OpenAI, the company behind ChatGPT.
Bond specifics
Breakdown of SoftBank's bond issuance
The bond issuance by SoftBank includes dollar-denominated senior notes worth $1 billion with a 3.5-year term, $4.5 billion with a 5.5-year term, and another $4.5 billion with a 7.5-year term.
The bonds carry interest rates of 8.625%, 9.25%, and 9.75%, respectively.
Additionally, two tranches of €500 million each in euro-denominated senior notes were issued for four and six years at yields of 7.125% and 8%.
Investment breakdown
Final tranche of SoftBank's $30B commitment to OpenAI
The latest bond issuance will help fund the final $10 billion tranche of SoftBank's $30 billion commitment to OpenAI.
Once this investment is completed, SoftBank's total investment in the AI company will reach an impressive $64.6 billion.
Earlier this month, SoftBank had also issued 1 trillion yen ($6.32 billion) worth of corporate bonds targeting retail investors as part of its funding strategy.