SoftBank to borrow over $11 billion in risky bonds for OpenAI stake
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SoftBank is planning to borrow more than $11 billion by issuing risky junk bonds to fund an additional payment for its stake in OpenAI. According to the Financial Times, these bonds will total $10 billion and 1 billion euros, carrying high interest rates and significant risk for investors. This move allows SoftBank to swap existing short-term loans of up to $40 billion for longer-term debt, potentially pushing the company past its current debt ceiling temporarily. The payment to OpenAI is scheduled for October, while the bond terms are expected to be finalized soon. Meanwhile, OpenAI anticipates burning through nearly $280 billion in cash by the end of 2030. SoftBank’s data center business also relies heavily on its contracts with OpenAI for future revenue streams. Most other major tech firms have recently opted for safer bond issuances compared to SoftBank's strategy.
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