SoftBank to borrow over $11 billion in risky bonds for OpenAI stake
SoftBank plans over $11 billion in junk bonds to fund its OpenAI stake and refinance short-term loans.
SoftBank plans to raise more than $11 billion through high-yield junk bonds to fund another payment for its OpenAI stake, the Financial Times reported, citing investor documents. The deal is sized at $10 billion plus 1 billion euros, with terms expected Thursday and the OpenAI payment due in October. SoftBank had already arranged short-term loans of up to $40 billion and wants longer-term debt, which could temporarily exceed its own debt ceiling. The FT also said OpenAI expects to burn nearly $280 billion in cash by the end of 2030, while SoftBank's data-center business relies on OpenAI contracts.
- SoftBank plans $10 billion plus 1 billion euros of junk bonds.
- Bond terms are expected Thursday; the OpenAI payment is due in October.
- SoftBank already lined up up to $40 billion in short-term loans.
- The FT says OpenAI may burn nearly $280 billion in cash by the end of 2030.
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SoftBank plans to borrow more than $11 billion from investors through risky bonds to fund another payment for its stake in OpenAI. That's according to the Financial Times, which cited investor documents.
These are known as junk bonds. They pay high interest, but they also carry a bigger risk that investors won't see their money again. Most other big tech firms have issued safer bonds recently, the FT reports. SoftBank is planning bonds worth $10 billion and 1 billion euros. The terms should be set Thursday, and the payment to OpenAI is due in October.
The Japanese company had already lined up short-term loans of up to $40 billion for OpenAI. Now it wants to swap those for longer-term debt, a move that could push SoftBank past its own debt ceiling for a while. OpenAI expects to burn through nearly $280 billion in cash by the end of 2030, according to the FT. SoftBank's data center business is also counting on its OpenAI contracts for future revenue.
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