SoftBank seeks another $10B loan to fund OpenAI investment
What's the story
SoftBank Group Corp. is looking for a $10 billion loan to finance its investment in US tech giant OpenAI, according to Bloomberg. The company has been on a debt financing spree related to its OpenAI bet, including a possible bond sale of up to $20 billion. The interest margin on the two-year facility would be around 275 basis points over the benchmark Secured Overnight Financing Rate, with Mizuho Bank Ltd. acting as the lead arranger and bookrunner.
Financial strategy
Loan proceeds to partially repay $40 billion bridge loan
SoftBank, founded and led by billionaire Masayoshi Son, is expected to invest nearly $65 billion in OpenAI by October.
The proceeds from this new loan could be used to partially repay a $40 billion bridge loan taken earlier this year for the same purpose.
The company is also considering a bond market offering between $10 billion and $20 billion to refinance bridge loan and planning a record ¥1 trillion ($6.3 billion) retail bond sale in Japan for its OpenAI investments.
Additional funding
US tech firms expected to invest in AI infrastructure
Earlier this month, SoftBank secured a $10 billion loan against its OpenAI stake.
The deal comes as US tech companies plan to invest trillions of dollars into data centers and other AI infrastructure in the coming years.
According to Bloomberg News data, companies have already borrowed over $410 billion this year for such facilities and other AI investments in the bond markets alone.