Why is SoftBank offering a high coupon rate on its new bond?

SoftBank's bond offers a 3.98% coupon, the highest in over 15 years, to attract retail investors amidst rising interest rates and a shifting Bank of Japan policy.

How much money did SoftBank raise from its recent bond issuance?

SoftBank raised approximately ¥500 billion (about $3.2 billion) from retail investors through its latest yen-denominated senior bond offering.

What will SoftBank use the funds from its bond sale for?

The proceeds will partially be used to repay a bridge loan related to SoftBank's investment in the artificial intelligence company OpenAI.

Home / Business and Economy / SoftBank Secures $3.2B with Record Yen Bond Rate

SoftBank Secures $3.2B with Record Yen Bond Rate

26 Nov

•

Summary

SoftBank raised ¥500 billion ($3.2 billion) via retail investors.
The bond's 3.98% coupon is the highest in over 15 years for SoftBank.
Proceeds will partially fund SoftBank's investment in OpenAI.

SoftBank Secures $3.2B with Record Yen Bond Rate

SoftBank Group has secured ¥500 billion ($3.2 billion) by issuing yen-denominated senior bonds to retail investors, achieving a coupon rate of 3.98%. This rate is the highest the company has offered on such a bond in more than fifteen years, reflecting a trend of increased retail participation in the corporate bond market following the Bank of Japan's pivot away from negative interest rates.

The issuance comes as Japanese firms are raising record amounts through retail bonds, with companies finding it more challenging to place debt with institutional investors. SoftBank's bond sale aims to partially finance its continued investment in artificial intelligence, notably an additional investment in OpenAI. This follows a recent period of strong performance for SoftBank, driven by gains in its AI-related holdings.

Despite recent market volatility that saw SoftBank's shares decline and credit risk measures widen, the company's ability to attract retail capital at a premium rate highlights a strategic funding approach. The funds will help manage its investment portfolio, which has seen significant contributions from its Vision Fund, particularly with rising valuations of AI ventures.