SoftBank Group has enlarged an existing credit line by $450m, bringing the total to $6.5bn, according to sources who spoke with Bloomberg. While this figure pales in comparison to the company's OpenAI expenditures, it serves as crucial financial flexibility given recent market turbulence. The original $6.05bn facility was set to mature this month; the expansion extends availability for another year. Bloomberg reported the development on September 18, noting that more than 20 financial institutions are participating in the arrangement. The new capital carries an interest margin of 210 basis points above the Secured Overnight Financing Rate.
SoftBank has not disclosed whether it has accessed any portion of the facility or plans to do so. A spokesperson for the company declined to provide comment to Bloomberg. The reporting relies on unnamed sources due to the confidential nature of the arrangement, and TNW has not independently confirmed the details.
Revolving credit facilities function as standby liquidity sources that remain available to borrowers throughout a specified period. Companies typically regard these arrangements as insurance against cash shortfalls rather than primary funding sources, and many never actually borrow against them.
The contrast with SoftBank's other financial commitments is stark. In February, the company pledged an additional $30bn toward OpenAI, structured as three $10bn tranches with the final payment due October 1. This brings SoftBank's total investment to $64.6bn at an approximate 13% interest rate and a $730bn pre-money valuation, as SoftBank disclosed at the time. The company indicated these funds would initially derive from bridge financing.
SoftBank secured a $40bn bridge loan in March and drew $30bn from it. This week, the company repaid the $25.9bn outstanding balance, according to Bloomberg. Subsequently, SoftBank obtained an $11.87bn term loan and a $10bn facility backed by its OpenAI holdings.
On the same day the credit line expansion became public, Bloomberg reported that SoftBank had increased its Arm-backed margin loan from $20bn to $25bn. Separately, Apollo Global Management is negotiating to expand its own lending commitment to $9bn from $5.4bn.
Additional financing may be forthcoming. This week, SoftBank held meetings with fixed-income investors in New York to assess demand for a junk bond offering valued between $10bn and $20bn, Bloomberg reported. A potential issuance could reach markets as soon as the following week. SoftBank characterized these investor discussions as exploratory and stated that no decisions have been made regarding any bond transaction. The remaining $10bn from the bridge loan becomes available for drawdown in early October.
These maneuvers occur within a shifting market environment increasingly skeptical of debt-financed artificial intelligence ventures. OpenAI's own public listing has been postponed due to safety considerations. Credit default swap spreads on SoftBank's debt reached their highest level in three years earlier this week, reflecting heightened default risk concerns. While the $6.5bn credit line may seem modest relative to other commitments Masayoshi Son has authorized this month, its timing suggests careful orchestration amid market volatility.
Source: The Next Web
