SoftBank Finalizes $11.87 Billion Loan to Supplement Financing for OpenAI Investment

en.Wedoany.com Reported - On September 14, people familiar with the matter revealed that SoftBank Group has finalized an $11.87 billion loan to support its financing needs related to its investment in OpenAI. The loan has a two-year term, and the final size exceeded the previously planned $10 billion. The agreement was signed last week, with approximately 20 banks participating in providing financing commitments.

This financing had undergone multiple rounds of adjustments. In April, SoftBank sought to raise a $10 billion two-year loan based on its OpenAI shares, with a one-year extension option; in May, due to banks' concerns about the valuation of the non-listed OpenAI equity and the disposal of collateral, the financing target was discussed to be lowered to approximately $6 billion. In July, SoftBank restarted negotiations for the $10 billion financing and added an arrangement in the structure whereby SoftBank Group would assume repayment responsibility, in order to reduce lenders' risk exposure to fluctuations in the value of OpenAI shares.

The financing plan disclosed at the end of August showed that the initial target for the new loan remained $10 billion, with a two-year term and a spread of approximately 275 basis points over the Secured Overnight Financing Rate (SOFR), with Mizuho Bank serving as lead arranger and bookrunner. The final financing size increased to $11.87 billion, an increase of $1.87 billion from the original plan, with the number of participating banks expanding to approximately 20.

This financing directly connects with the funding arrangements for SoftBank's additional investment in OpenAI this year. On February 27, SoftBank signed a $30 billion additional investment agreement with OpenAI, to be executed by SoftBank Vision Fund 2 in three batches of $10 billion each, scheduled to be completed on April 1, July 1, and October 1 respectively. After full execution, SoftBank's cumulative investment in OpenAI since September 2024 is expected to reach $64.6 billion, with an equity stake of approximately 13%. SoftBank explicitly stated at the time that the additional investment would first be funded through bridge loans and other financing provided by major financial institutions, and then gradually replaced using existing assets and other financing tools.

In March of this year, SoftBank also signed a bridge financing facility with a total limit of $40 billion, with cumulative drawdowns of $30 billion. On September 9, SoftBank announced that it would repay the remaining $25.9 billion balance of the bridge loan early on September 15. The original maturity date of the $40 billion bridge loan was March 25, 2027, and it was mainly used for funding needs such as the additional investment in OpenAI. The newly completed $11.87 billion two-year loan and the bridge loan are different financing arrangements. SoftBank is reconfiguring the short-term debt previously used for OpenAI investment through longer-term bank loans and other capital market instruments.

According to the investment timetable previously announced by SoftBank, the third batch of $10 billion in additional investment in OpenAI is scheduled to be executed on October 1; after this batch of investment is completed, the entire $30 billion additional investment plan will be fully implemented. OpenAI shares are recorded in SoftBank Group's financial statements as financial assets measured at fair value through profit or loss, and their value is remeasured quarterly.