SoftBank Group Corp. (SOBKY), a Japanese company expanding its investments in artificial intelligence, plans to raise about 60 billion ($369 million) through a bond offering to institutional investors in Japan later this month. The transaction is expected to include roughly 50 billion of three-year notes and 10 billion of five-year notes during the week of July 27. Daiwa Securities Co., a Japanese securities firm, will serve as lead manager, while Nomura Securities Co. and SMBC Nikko Securities Inc., two securities companies involved in the offering, will also help arrange the deal.
The planned bond sale highlights SoftBank's growing funding requirements as the company increases its exposure to AI investments, including a commitment of almost $65 billion to OpenAI, an artificial intelligence company. SoftBank has already raised 678 billion this year through subordinated bonds sold to retail investors and also accessed the U.S. dollar and euro bond markets in April. The company has separately considered a margin loan backed by its OpenAI stake, although the potential borrowing target has been reduced to around $6 billion from an initial $10 billion.
The latest financing comes as investor concerns over returns from AI spending have placed pressure on semiconductor-related stocks, including Arm Holdings Plc NASDAQ:ARM, SoftBank's chip-technology subsidiary. SoftBank shares have declined from their early-June peak following reports that OpenAI's initial public offering may be delayed. S&P Global Ratings, a credit-rating agency, revised its outlook on SoftBank to stable from negative on July 16, saying the company's financial position had improved more than previously expected after a sharp increase in Arm's share price. The agency also affirmed SoftBank's BB+ long-term issuer credit rating, leaving the company one level below investment grade.