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SoftBank’s junk-bond deal highlights rising capital costs for AI race
The Japanese conglomerate is paying record yields north of 9% to raise over $11 billion, signaling that the AI arms race is getting expensive fast
When Masayoshi Son wants something, he writes big checks. The problem is that the checks are getting more expensive to cash.
SoftBank Group is pushing ahead with one of the largest corporate high-yield bond offerings ever, seeking to raise more than $11 billion to refinance short-term bridge loans and pour more capital into OpenAI. The price tag for that privilege: yields between 9% and 10% on the dollar-denominated tranches, record levels for a company that has never been shy about leveraging up.
The deal structure
The offering is split across multiple tranches, with $10 billion in dollar-denominated notes spanning maturities of 3.5 to 7.5 years, plus an additional roughly €1 billion in euro-denominated notes. The longest euro tranches are pricing in the mid-8% area.
SoftBank carries a BB+ credit rating from both S&P and Fitch, the highest rung on the junk-bond ladder.
For context, SoftBank already set a company record back in April 2026 when it raised $3.6 billion in junk bonds with an 8.5% coupon on the 10-year dollar tranche. The new deal eclipses that benchmark by a wide margin, both in size and in cost.
Despite the steep pricing, early demand has been fierce. More than $20 billion in preliminary interest has materialized from investors. Closing is expected in October 2026.
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Where the money goes
The bond proceeds serve two purposes. First, they refinance a chunk of SoftBank’s $40 billion bridge facility, which was originally arranged to fund the firm’s massive investment in OpenAI. As of September 15, SoftBank had already repaid $25.9 billion of that bridge loan. The remaining capacity of approximately $10 billion will be canceled once the new bonds close.
Second, the capital gives SoftBank longer-duration debt to support its continued AI spending spree. The company has committed nearly $65 billion to OpenAI, a sum that would secure an approximate 13% equity stake in the artificial intelligence company.
What this means for the AI capital race
SoftBank’s bond deal is a useful barometer for the broader AI investment landscape. Global AI-related debt issuance has exceeded $575 billion this year.
When SoftBank pays 9-10% on its debt to fund an equity stake in OpenAI, the implied return threshold becomes extremely high. OpenAI’s valuation and revenue trajectory need to justify not just the $65 billion investment, but also the compounding financing costs layered on top.
Companies that can access cheaper capital hold a structural advantage in the AI race. Firms like Microsoft, Alphabet, and Apple can fund AI investments from cash flow or at investment-grade borrowing costs several percentage points below what SoftBank is paying.
SoftBank’s willingness to pay record yields reflects a bet that the returns from AI, specifically from OpenAI, will dwarf the cost of capital. Masayoshi Son has made that kind of asymmetric wager before, most famously with his early investment in Alibaba.
A 9-10% yield on a BB+ issuer with heavy concentration in a single investment is not a vote of confidence. It is a risk premium, calculated and specific, for the possibility that the AI boom does not unfold on the timeline or at the scale Son is banking on.