SoftBank is using the bond market to inject capital into its AI empire, while the junk bond market faces a historic test.

SoftBank's large-scale bond issuance is becoming a key test for the bond market to gauge investors' enthusiasm for AI investment and their risk tolerance.

On September 22, Bloomberg, citing sources familiar with the matter, reported that SoftBank Group's bond issuance has attracted initial investment intentions of over $20 billion, potentially ranking among the largest junk bond transactions in history. The funds raised will primarily support SoftBank's massive investment in OpenAI, with investors scrambling to lock in potentially record-high yields.

The aforementioned demand represents only early, non-binding subscription intentions from investors and is primarily for reference before formal pricing, which is expected to be completed on Thursday. The offering exceeds $11 billion, including $10 billion in dollar bonds and €1 billion (approximately $1.1 billion) in euro-denominated bonds. SoftBank stated that the transaction is progressing smoothly with strong demand, but there are currently no plans to expand the offering size.

This transaction comes at a time when global borrowing costs are rising across the board and the prospects and risks of AI continue to cause market volatility. Its final pricing and market reaction will also serve as an important window into investors' confidence in AI assets.

Yields may hit record highs; pricing discussions are still ongoing.

According to Bloomberg, citing sources familiar with the matter, SoftBank and its lead underwriters have been communicating with investors regarding the potential pricing of the offering. The longest-term dollar portion is a 7.5-year note with a potential yield under discussion of up to approximately 10%; the longest-term euro portion is a 6-year note with a discussed range around the mid-8%.

If the final pricing is set at the aforementioned level, it will set a record for yields in the corresponding currency and maturity. However, sources familiar with the matter indicate that these figures are still in the exploratory communication stage and have not yet entered the formal initial price guidance phase, so the final pricing remains uncertain. SoftBank held a roadshow conference call for global investors on Monday and will continue on Tuesday.

The underwriting team is formidable. Citigroup served as the master bookrunner and joint global coordinator for the US dollar portion, with Goldman Sachs, JPMorgan Chase, and Morgan Stanley also involved. For the euro portion, JPMorgan Chase served as the master bookrunner, with Goldman Sachs and Deutsche Bank as joint global coordinators.

SoftBank's AI funding footprint continues to expand.

This bond issuance is the latest in SoftBank's recent flurry of fundraising efforts. The group, led by SoftBank founder Masayoshi Son, has committed nearly $65 billion to OpenAI, making it one of the world's largest AI investors.

To support its massive AI investment strategy, SoftBank has been continuously increasing its financing this year. In March, SoftBank signed a $40 billion bridge loan to further invest in OpenAI, and has already repaid $25.9 billion of the outstanding balance. Last week, SoftBank expanded a margin loan secured by shares of its chip subsidiary Arm by $5 billion to $25 billion, while also increasing an existing credit line by $450 million to $6.5 billion.

In addition, Apollo Global Management is in talks to increase a loan to SoftBank by $3.6 billion to $9 billion to help it finance its OpenAI investments; SoftBank also secured a $11.87 billion loan, also to support its OpenAI investments.

According to data compiled by Bloomberg, SoftBank has issued nearly $15 billion in bonds across currencies this year, making it the largest bond issuer among junk-rated borrowers globally by 2026.

AI uncertainty and credit risk are drawing market attention.

Despite strong demand, market concerns about SoftBank's credit risk are also rising. According to data compiled by Bloomberg, the yield on SoftBank's dollar bonds maturing in 2031 rose to 8.2% earlier this month, a significant increase from the January low of 6.7%, reflecting the dual pressure of widening credit spreads and rising benchmark U.S. Treasury yields.

Meanwhile, some leaders of top global AI platforms have recently called for a slowdown in AI development due to security concerns, adding uncertainty to the prospects of AI investment and pushing SoftBank's debt default insurance costs to their highest level in three years. OpenAI CEO Sam Altman stated that the company will not go public this year, meaning that SoftBank's massive investment in OpenAI will not be able to exit through the public market in the short term, and the liquidity of related assets is also attracting market attention.

In terms of credit ratings, SoftBank is currently rated BB+ by BOC and Fitch, at the highest level of speculative grade. In contrast, the two companies with the largest corporate bond issuances so far in 2026—Alphabet and Amazon—have ratings of AA+ and AA, respectively, both higher than Japan's sovereign credit rating.

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