SoftBank Group is preparing to issue 1 trillion yen, roughly $6.3 billion, in seven-year corporate bonds aimed at Japanese retail investors, marking the largest retail bond offering in the nation's history. According to company filings, the bonds are slated for pricing on September 4, with a coupon guidance range set between 4.3% and 4.9%.

This fundraising move comes as SoftBank has already committed over $60 billion to OpenAI, the developer of ChatGPT, and continues to secure capital to meet those payment obligations. With demand for AI tools and services climbing from OpenAI and other hyperscalers, SoftBank is accelerating its data center investments to expand computing capacity.

This marks SoftBank's third retail bond sale of the year, following earlier issuances in April and June that raised 418 billion yen and 260 billion yen, respectively. In March, S&P Global Ratings revised SoftBank's outlook from "stable" to "negative," cautioning that further investments in OpenAI could strain liquidity and credit quality, describing OpenAI as one of SoftBank's weakest credit investments.

However, the outlook shifted in July. A sharp rally in shares of Arm Holdings, the chip design firm that accounts for more than 40% of SoftBank's investment assets, has significantly bolstered key financial metrics. On July 16, S&P upgraded SoftBank's outlook from "negative" back to "stable," while maintaining its "BB+" long-term issuer credit rating, which remains one notch below investment grade. S&P noted that SoftBank's key financial indicators improved more than previously anticipated.

S&P estimates that once the additional $30 billion investment is fully completed, OpenAI will represent 20% to 30% of SoftBank's investment assets, making it the second-largest holding after Arm. Earlier this month, SoftBank reported a quarterly net profit of 1.83 trillion yen for the period ending March 31, with profits surging largely due to valuation gains from its OpenAI stake.

Previously, SoftBank had explored margin loans backed by its OpenAI shares, later trimming its fundraising target from $10 billion to roughly $6 billion. In its latest earnings report, the company posted investment gains of 1.86 trillion yen for the first quarter, driven primarily by its holdings in chipmaker Intel, which contributed 1.33 trillion yen, or about $8.5 billion, in gains. Intel's share price more than doubled in the three months through June 30.

These gains helped offset limited valuation growth in SoftBank's major bet on OpenAI and declines in some assets within its Vision Fund portfolio, including a drop in shares of PayPay, the payment app company that recently went public. Vision Fund investment gains totaled 460.06 billion yen, down 30% year over year.

In early August, SoftBank secured a $10 billion margin loan collateralized by its stake in OpenAI, marking another significant financing step in its aggressive AI push. The company disclosed in its latest financial report that it reached an agreement with Goldman Sachs, JPMorgan, Mizuho Securities USA, Apollo Global Financing, and Sumitomo Mitsui Banking Corporation for the two-year loan. SoftBank added that these institutions are serving as lead arrangers, with plans to draw the funds this month.

According to the disclosure, SoftBank will act as guarantor for the borrowing, with proceeds designated for general corporate purposes of the group and its Vision Fund 2. Under certain conditions, the loan requires the borrower to post additional cash collateral or repay early, such as in the event of a significant decline in the value of OpenAI's preferred shares.