SoftBank Group Corp. is looking for a $10 billion loan to refinance debt linked to its investment in OpenAI, according to sources familiar with the situation. The loan would have an interest margin of about 275 basis points over the benchmark Secured Overnight Financing Rate. Mizuho Bank Ltd. is the lead arranger for this loan.
Key Details
This loan is part of SoftBank's larger plan to secure funding for its big commitments to OpenAI, expected to total around $65 billion by October. The funds may also be used to pay off a $40 billion bridge loan taken earlier this year for the same investments. Additionally, SoftBank is considering a bond sale of up to $20 billion to further support its financing efforts.
Background
Recently, SoftBank secured a $10 billion loan backed by its OpenAI stake. This loan includes covenants that may require early repayment or cash postings. The company is also planning a record ¥1 trillion ($6.3 billion) retail bond sale in Japan to fund its commitments to OpenAI. This financial activity comes as U.S. tech firms prepare to invest trillions in AI infrastructure. Over $410 billion has already been borrowed this year for data centers and related projects, according to Bloomberg News.
Related coverage: Alibaba Launches $10.2 Billion Share Placement for AI Growth.
SoftBank's funding efforts could affect the broader tech sector, especially companies involved in AI infrastructure and financing. The potential rise in debt levels may raise concerns about credit risks in the artificial intelligence market. Investors will be watching for upcoming commitments due on August 31, which could influence SoftBank's financial strategy going forward.
Based on reporting by: livemint.com, businesstimes.com.sg