SoftBank's massive bond offering is emerging as a defining moment for debt markets, testing investors' appetite for AI-driven investments against their tolerance for heightened risk.

According to sources familiar with the matter, the Japanese conglomerate's bond sale has already attracted over $20 billion in initial indications of interest, positioning it among the largest junk-bond transactions in history. Proceeds from the issuance, expected to price Thursday, will primarily fund SoftBank's substantial investment in OpenAI, with investors rushing to lock in potentially record-breaking yields. These early figures, however, represent non-binding expressions of interest used as a reference ahead of formal pricing, and SoftBank has indicated no current plans to upsize the deal, which totals more than $11 billion, comprising $10 billion in dollar-denominated notes and €1 billion (approximately $1.1 billion) in euro-denominated notes.

The transaction arrives at a time of rising borrowing costs across global markets and persistent volatility tied to AI's promise and pitfalls. Its final pricing and market reception will serve as a key barometer of investor conviction in AI assets.

Record Yields on the Table as Pricing Talks Underway

Sources indicate that SoftBank and its lead underwriters have begun discussing potential pricing with investors. The longest-dated dollar tranche, a 7.5-year note, is being floated at a yield near 10%, while the longest euro tranche, a 6-year note, is being discussed in the high-8% range. Should the notes price at these levels, they would set yield records for their respective currencies and tenors. Still, these figures remain preliminary and have not yet entered the formal initial price guidance stage, leaving room for adjustment. SoftBank held a global investor roadshow call on Monday and will continue presentations on Tuesday.

The underwriting syndicate is notably robust. Citigroup serves as lead bookrunner and joint global coordinator for the dollar portion, with Goldman Sachs, JPMorgan, and Morgan Stanley also involved. JPMorgan leads the euro tranche, with Goldman Sachs and Deutsche Bank acting as joint global coordinators.

SoftBank's AI Funding Push Expands

This bond issuance is the latest in a series of aggressive financing moves by SoftBank, led by founder Masayoshi Son. The group has committed nearly $65 billion to OpenAI to date, making it one of the world's largest AI investors. To support this sprawling AI strategy, SoftBank has steadily increased its borrowing this year. In March, the company signed a $40 billion bridge loan to boost its OpenAI stake, of which $25.9 billion has since been repaid. Last week, SoftBank expanded a margin loan backed by shares of its chip subsidiary Arm by $5 billion to $25 billion, while also increasing an existing credit facility by $450 million to $6.5 billion.

Additionally, Apollo Global Management is in talks to increase a loan to SoftBank by $3.6 billion to $9 billion to aid OpenAI funding, and SoftBank has secured a separate $11.87 billion loan for the same purpose. According to compiled data, SoftBank has issued nearly $15 billion in bonds across currencies so far this year, making it the largest borrower in the global high-yield market through 2026.

AI Uncertainty and Credit Risk Come Under Scrutiny

Despite robust demand, concerns over SoftBank's creditworthiness are also mounting. The yield on SoftBank's 2031 dollar bonds rose to 8.2% earlier this month, up sharply from a January low of 6.7%, reflecting both widening credit spreads and higher U.S. Treasury benchmark yields. Meanwhile, calls from some top AI platform leaders to slow the pace of AI development over safety concerns have added uncertainty to the investment outlook, pushing the cost of insuring SoftBank's debt against default to its highest level in three years. OpenAI CEO Sam Altman has stated the company will not go public this year, meaning SoftBank's substantial investment cannot be exited through public markets in the near term, drawing attention to the liquidity of these assets.

On the credit rating front, SoftBank holds a BB+ from S&P and Fitch, the highest tier of speculative grade. In contrast, the two largest corporate bond issuers in 2026 to date, Alphabet and Amazon, are rated AA+ and AA, respectively, both exceeding Japan's sovereign rating.