SoftBank adds 21 lenders to $40 billion OpenAI bridge loan

SoftBank Group attracted 21 new lenders to its $40 billion unsecured bridge loan for OpenAI, distributing about $7 billion in commitments as the Japanese conglomerate deepens its bet on artificial intelligence. First Abu Dhabi Bank, Singapore sovereign wealth fund GIC and Standard Chartered each underwrote nearly $1 billion, with the remainder allocated among banks in Europe, Japan and Taiwan, according to people familiar with the matter.

The one-year facility, originally arranged in March by JPMorgan Chase, Goldman Sachs, Mizuho Bank, Sumitomo Mitsui Banking Corp. and MUFG Bank, carries an initial interest margin of 250 basis points above the Secured Overnight Financing Rate, implying a rate of about 6.14%. The loan matures March 25, 2027, and is primarily funding a $30 billion follow-on investment in OpenAI through SoftBank Vision Fund 2, with part of the proceeds available for general corporate purposes.

The syndication's success reduces the amount the original underwriters must retain on their balance sheets and signals sustained institutional appetite for debt tied to artificial intelligence. Earlier participants included HSBC, BNP Paribas and Intesa Sanpaolo, who joined during a sub-underwriting phase before the facility was distributed in smaller portions to a wider group.

The bridge loan represents the centerpiece of founder Masayoshi Son's strategy to reposition SoftBank around AI, semiconductor design, robotics and data-center infrastructure. SoftBank had already invested $34.6 billion in OpenAI through Vision Fund 2 from September 2024 before agreeing to the additional $30 billion commitment, which is being paid in three $10 billion tranches on April 1, July 1 and Oct. 1, 2026. The company has said the investment will give it roughly 13% ownership after completion.

Refinancing Pressure Builds

The short maturity means SoftBank must replace or repay the borrowing before March next year through longer-term debt, asset sales or other secured financing. The group has already raised $1.5 billion and 1.75 billion euros through international bond offerings in April, with part of the proceeds earmarked for refinancing obligations tied to the OpenAI investment. Those bonds carried comparatively high coupons, reflecting both market conditions and the risks attached to SoftBank's concentrated AI strategy.

SoftBank has also explored a separate loan of about $10 billion backed by its OpenAI holding, though discussions faced resistance because banks found it difficult to value shares in a privately held technology company. The company later offered lenders recourse to its own balance sheet if the pledged shares lost value, strengthening creditor protection. JPMorgan, Goldman Sachs and Mizuho have been involved in those negotiations.

The company's ability to service its debt is supported by the sharp appreciation of its OpenAI stake. SoftBank booked a $46 billion annual gain at the Vision Fund, driven mainly by the rise in value of its OpenAI investment, according to CNBC. The fair value of SoftBank's total OpenAI position reached $79.6 billion at the end of March against a cumulative investment cost of $34.6 billion, according to the company's earnings release. Those gains, however, are mark-to-market and not cash in hand.

SoftBank has sought to maintain its loan-to-value ratio below 25%, a self-imposed ceiling designed to reassure creditors and shareholders. Heavy spending on OpenAI could pressure that target unless the company raises additional capital, monetizes listed holdings such as Arm Holdings, or benefits from higher portfolio valuations. Arm remains one of SoftBank's most valuable publicly traded assets and an important source of potential liquidity.

The transaction tests financial institutions' appetite for debt tied indirectly to privately owned AI companies. OpenAI requires vast capital to train models, purchase advanced chips and build computing infrastructure, while the timing and scale of future profits remain uncertain. Banks participating in the loan gain access to a prominent corporate relationship and sizeable fee income, but also assume exposure to a borrower whose asset values can fluctuate sharply because much of its portfolio is concentrated in technology businesses.

This article is for informational purposes only and does not constitute investment advice.