SoftBank Group (SFTBY, Financials), the Japanese technology investment corporation, secured more support from lenders for a $40 billion bridge loan linked to its investment in OpenAI.
Twenty-one additional lenders joined the financing and secured almost $7 billion of the entire credit, according to a Bloomberg story published by Seeking Alpha. Around $1 billion was provided by First Abu Dhabi Bank, Singapore sovereign wealth fund GIC and Standard Chartered. Other parts were handed out to European, Japanese and Taiwanese banks.
The remaining $33 billion remains with the original underwriters and senior lenders though more of the facility could be syndicated later. The unsecured bridge loan comes due in March 2027. It was intended to assist fund SoftBank's stake in OpenAI and provide financing for broader company reasons.
The loan has an initial margin of around 250 basis points over the Secured Overnight Financing Rate. Current rates mean the cost of borrowing is around 6.14%. The wider syndication dilutes the concentration of the initial lenders, and gives SoftBank room to pursue its AI-focused investment strategy.
The financing also adds leverage, so the cost and performance of its OpenAI investment will matter for future profits. Investors will now be looking for further syndication, changes in borrowing prices and more clarity on SoftBank's plans to fund OpenAI.