SoftBank expands $6.05bn credit facility to $6.5bn with 20-plus banks
More than 20 banks are on the expanded facility, priced at 210 basis points over SOFR. SoftBank declined to comment to Bloomberg.
SoftBank Group has added $450m to an existing credit line, lifting the facility to $6.5bn, people familiar with the matter told Bloomberg.
Set against what the company is spending on OpenAI, the sum is a rounding error. Set against the week SoftBank has just had, it is more like a seatbelt.
The previous facility, worth $6.05bn, was due to expire this month, and the expanded line gives SoftBank another year to draw on it, Bloomberg reported on September 18. More than 20 banks are involved, and the new money carries an interest margin of 210 basis points over the Secured Overnight Financing Rate.
Whether SoftBank has drawn anything or intends to is unknown. A company representative declined to comment to Bloomberg. TNW has not independently verified the reporting, which rests on people who asked not to be identified because the arrangement is private.
Commitment lines of this kind are revolving facilities that lenders keep available for a set period. Borrowers treat them as liquidity insurance rather than funding, and frequently never touch them.
Everything else on SoftBank’s balance sheet is the opposite. The company committed in February to a further $30bn in OpenAI, in three installments of $10bn, the last of them due on October 1.
That takes its cumulative investment to $64.6bn, with an interest rate of roughly 13%, at a $730bn pre-money valuation, SoftBank said at the time. The money, it added, would come initially from bridge loans.
It duly did. SoftBank signed a $40bn bridge loan in March, drew $30bn of it, and repaid the $25.9bn outstanding this week, per Bloomberg. Since then, it has taken an $11.87bn term loan and a $10bn loan secured on its OpenAI stake.
On the same day the credit line was reported, Bloomberg also reported that SoftBank had raised its Arm-backed margin loan by $5bn to $25bn. Apollo Global Management, separately, is in talks to increase its own loan to $9bn from $5.4bn.
There may be more. SoftBank has spent the week meeting with fixed-income investors in New York to gauge appetite for a $10bn to $20bn junk bond, according to Bloomberg, which reported that a deal could reach the market as early as next week.
The company described those meetings as non-deal and said nothing had been determined on any bond issuance. The remaining $10bn of the bridge loan can next be drawn in early October.
The backdrop to all of it is a market that has grown noticeably less relaxed about debt-funded AI, with OpenAI’s own listing pushed back on safety grounds.
The cost of insuring SoftBank’s debt against default hit a three-year high earlier this week. A standby facility that nobody may ever draw on is not the largest number Masayoshi Son signed off this month. On current evidence, it may be the most carefully timed.
Originally published by thenextweb.com. Syndicated material does not necessarily reflect the views of Glamour Canada.
