SoftBank Group proposed notes rated BB+ as OpenAI funding lifts debt outlook

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SoftBank notes rated BB+ for OpenAI

Highlights

Fitch rated SoftBank Group’s proposed USD and euro-denominated senior unsecured notes BB+, aligned with its Long-Term Foreign-Currency Issuer Default Rating, to fund the October 2026 OpenAI investment and partially cancel the 2026 bridge loan facility.
Arm Holdings and OpenAI investments drove USD364 billion in fair value gains by June 2026, resulting in approximately 275% growth in SoftBank’s equity portfolio from March 2023 to June 2026.
Fitch projects SoftBank’s gross and net loan-to-value ratios to rise to 31% and 28% by March 2027 due to increased debt, but notes adequate liquidity, asset monetization options, and no deviation from historical financial policy.

Note issuance tied to OpenAI closing

As reported by Fitch Ratings, the proposed U.S. dollar- and euro-denominated senior unsecured notes are rated in line with SoftBank Group's Long-Term Foreign-Currency Issuer Default Rating because they are direct, unsecured and unsubordinated obligations ranking pari passu with its other similar debt. Proceeds are set to support the 1 October 2026 closing of the group's 2026 OpenAI follow-on investment, alongside the cancellation of all or part of the undrawn capacity under its 2026 bridge loan facility, with any remaining funds to be used for general corporate purposes.

Fitch says SoftBank's ratings continue to reflect its ability to generate large gains from major technology shifts across broadband, mobile, internet and AI, while also capturing the volatility that comes with concentrated exposure to a relatively small number of large positions. The agency says Arm Holdings and OpenAI together generated USD364 billion in fair value gains by end-June 2026, helping drive about 275% growth in SoftBank's equity portfolio from end-March 2023 to end-June 2026.

At the same time, Fitch says the group's weighted-average portfolio credit strength is constrained at 'bb' by the risk profile of the SoftBank Vision Funds and Latin American Funds, particularly their exposure to OpenAI and other higher-risk investments. The ratings also factor in SoftBank's AI-focused strategy spanning models, chips, infrastructure and robotics, with capital allocation driven by expected returns and internal limits on loan-to-value and liquidity rather than a fixed budget.

Leverage rises, but funding access supports profile

Fitch expects Fitch-defined gross and net loan-to-value ratios to rise to about 31% and 28% by end-March 2027, from 20% and 18% at end-June 2026, mainly because debt is increasing to fund contracted investments. Even so, the agency says it does not expect SoftBank to depart from its financial policy, citing its record of keeping company-defined loan-to-value below 25% over the past decade and its ability to monetize listed assets if needed.

The agency also points to broad funding flexibility, including access to Japanese and international capital markets, long-standing bank relationships and experience in asset-backed monetization and financing transactions. SoftBank had about JPY1.8 trillion in cash and about JPY490 billion in undrawn committed lines at end-June 2026, against roughly JPY1.5 trillion of bond redemptions due over the next two years.

Fitch notes that SoftBank arranged a USD40 billion bridge loan facility in March 2026 and has drawn USD30 billion in aggregate, while prepaying the entire outstanding USD25.9 billion balance on 15 September 2026. The rating agency says future bridge repayment and refinancing are expected to be supported by a mix of asset-backed financing, bond issuance, loan facilities and asset monetization, while warning that weaker execution, higher sustained leverage or deteriorating market access could pressure the rating.

Our earlier article on residual value guarantees in AI infrastructure financing explained how large tech groups are using special-purpose vehicles and guarantee structures to fund data centres and chips while keeping much of the exposure off balance sheet. We noted that these arrangements can lower funding costs but add complexity to credit risk, especially as off-balance-sheet commitments grow alongside accelerating AI capex.

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