SoftBank Group Corp. is seeking a $10 billion loan, as it looks for more funding to help refinance debt used for its investment in US tech giant OpenAI, according to people familiar with the matter.
The interest margin on the two-year facility would be around 275 basis point over the benchmark Secured Overnight Financing Rate, and Mizuho Bank Ltd. is the mandated lead arranger and bookrunner, said the people, who asked not to be identified as the matter is private.
The loan would add to SoftBank’s flurry of recent debt financing activities tied to its bet on OpenAI, including a potential bond sale of as much as $20 billion, despite concerns about growing credit risks in the artificial intelligence sector. SoftBank, founded and led by billionaire Masayoshi Son, is slated to invest close to $65 billion in OpenAI by October.
Proceeds of the loan could partly be used to repay a $40 billion bridge loan secured earlier this year for the OpenAI investments, the people said. Commitments are due Aug. 31 and banks are already in talks to join, the people added.
The International Financing Review reported news of the deal earlier this week.
SoftBank is also looking at tapping the bond market for additional funding. It’s considering $10 billion to $20 billion offering to help refinance the bridge loan, and it’s planning a record ¥1 trillion ($6.3 billion) retail bond sale in its home market for its investment commitments to OpenAI.
The company earlier this month also secured a $10 billion loan backed by its OpenAI stake, which includes covenants that may require it to post cash or repay early.
SoftBank’s borrowings come as US tech firms are planning to pour trillions of dollars into data centers and other AI infrastructure in the coming years. Companies have already borrowed more than $410 billion so far this year for such facilities and other AI investments in the bond markets alone, according to data compiled by Bloomberg News.
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