Summary
- Bloomberg News reported that SoftBank sold $3.6 billion of junk bonds to fund aggressive investment in AI.
- SoftBank sold the bonds at yields about 1.7 percentage points above the market average, including an 8.5%% coupon on 10-year dollar bonds.
- The market has viewed SoftBank's AI investment scale as excessive, and S&P Global lowered its credit outlook to "negative."
Forecast Trend Report by Period
SoftBank Group has sold $3.6 billion of junk bonds to fund aggressive investments in artificial intelligence, Bloomberg News reported on May 15, citing people familiar with the matter.
SoftBank issued $1.5 billion of dollar-denominated bonds and 1.75 billion euros ($1.96 billion) of euro-denominated notes, Bloomberg reported. The 10-year dollar bonds carry an 8.5% coupon, the highest on any bond the company has sold. The average yield on dollar-denominated junk bonds was 6.81% as of May 14, according to Bloomberg indexes. That means SoftBank's latest sale came at roughly 1.7 percentage points above the market average.
SoftBank has made massive investments in the AI industry over the past year. Most of the $30 billion it invested in OpenAI in March was funded through borrowing and asset sales. At the time, the company obtained $40 billion in 12-month bridge loans from JPMorgan, Goldman Sachs and Mizuho Bank. The market has viewed SoftBank's AI investment scale as excessive. S&P Global lowered its outlook on the company's credit rating to negative from stable.
Lee Mi-a, Hankyung.com reporter mia@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
