SoftBank Group Corp. launched an $11 billion junk bond sale on Tuesday as billionaire Masayoshi Son moves to finance the conglomerate's investment in OpenAI. The sale drew over $20 billion in early demand from investors.
The Japanese conglomerate is offering yields in the 9 to 10 percent range, according to people with direct knowledge of the transaction. Those yields represent a premium to typical junk bond levels, a pricing strategy designed to attract institutional capital into one of the largest corporate high-yield bond sales on record.
SoftBank has positioned itself as one of the world's largest allocators to artificial intelligence infrastructure and compute over the past 18 months. Son has committed billions to OpenAI, the ChatGPT maker, and has also backed AI chip designers and data center operators. The $11 billion offering is part of the funding strategy to sustain those positions as the company competes with rivals like Nvidia and major cloud providers for dominance in AI deployment.
Junk bond markets have expanded significantly since 2023, with issuers finding ready demand from yield-hungry investors in a higher interest rate environment. SoftBank's size and the specific yield premium it is offering show that even large corporate borrowers must pay higher rates to access capital for speculative bets, even when backed by an established conglomerate with revenue in the tens of billions of dollars annually.
The early oversubscription, with $20 billion in demand for an $11 billion deal, indicates strong appetite among institutional investors for SoftBank's credit despite the company's concentration bet on artificial intelligence. That ratio of nearly 1.8 times oversubscription is consistent with strong junk bond market conditions but also demonstrates the scale of capital SoftBank is mobilizing relative to typical corporate bond sales.
The document to watch is SoftBank's final pricing announcement, which will confirm whether the conglomerate accepts the full $11 billion or reduces the size based on investor feedback, and whether the final yield stays within the 9 to 10 percent range or shifts higher.
