SoftBank Group completed a $10.0 billion payment to OpenAI on 1 October, finishing its $30.0 billion follow-on investment and taking its cumulative investment to $64.6 billion, the company said in an announcement published by MarketScreener. SoftBank put its ownership interest at approximately 13%.
Key points
- The $10.0 billion payment was the third and final instalment of SoftBank’s $30.0 billion follow-on investment in OpenAI.
- SoftBank said proceeds from foreign currency-denominated senior notes funded the payment through Vision Fund 2.
- The company cancelled $10.0 billion of unused capacity under a $40.0 billion bridge facility, effective 30 September.
Vision Fund 2 completes three payments
SoftBank made the final investment through SoftBank Vision Fund 2. It gave the payment a value of JPY 1,579.6 billion, using a conversion rate of JPY 157.96 to the dollar. The amount completes the additional OpenAI investment SoftBank announced on 27 February.
The first $10 billion instalment was executed on 1 April and the second on 1 July, International Business Times reported. The 1 October payment completes the sequence of three equal instalments. SoftBank’s stated $64.6 billion cumulative investment includes the follow-on commitment as well as its earlier investment in OpenAI.
The payment also fixes the scale of SoftBank’s reported ownership position at the completion of the commitment. Its approximately 13% interest is an equity stake, while the financing used for the final instalment is debt issued by SoftBank.
SoftBank bonds finance the final $10 billion
SoftBank said it used proceeds from foreign currency-denominated senior notes announced on 24 September to fund the final OpenAI payment. AI Affairs reported the completion of its $11.1 billion bond sale for the investment. The bond financing places interest and repayment obligations on SoftBank, independently of the value of its OpenAI holding.
The notes were issued in five series, with three denominated in dollars and two in euros, FourWeekMBA reported. The dollar series comprised $1,000 million at an annual coupon of 8.625% due on 1 April 2030, $4,500 million at 9.250% due on 1 April 2032, and $4,500 million at 9.750% due on 1 April 2034.
SoftBank also issued €500 million at 7.125% due on 1 October 2030 and €500 million at 8.000% due on 1 October 2032, FourWeekMBA reported. The stated uses of proceeds were the final OpenAI payment and general corporate purposes. The bond terms assign no particular currency series exclusively to either use.
S&P Global Ratings Japan and Fitch Ratings Japan assigned the notes BB+, below investment grade, according to FourWeekMBA. Fitch expected SoftBank’s leverage to increase as it met its investment commitments, while forecasting sufficient liquidity and continued access to debt markets, Quartz reported. AI Affairs also reported demand of more than $20 billion for the bond deal.
SoftBank closes its $40 billion bridge facility
The bond funding followed an earlier borrowing arrangement. SoftBank entered into a $40.0 billion bridge facility agreement on 27 March and said it cancelled the remaining $10.0 billion of undrawn capacity effective 30 September. Undrawn capacity was money available to borrow under the agreement, rather than an outstanding loan.
SoftBank announced an early repayment of bridge loans on 9 September. Following that repayment and the cancellation of the unused capacity, the company said all borrowing under the facility had been repaid and no undrawn commitments remained.
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