SoftBank to Issue Record 1 Trillion Yen Unsecured Bonds
SoftBank has announced plans to issue a record-breaking 1 trillion yen in 7-year unsecured bonds targeted at individual investors. Concurrently, the company is reducing its OpenAI-collateralized loan size from $10 billion to $6 billion. This massive bond issuance highlights SoftBank's strategy to diversify its funding sources by tapping into Japanese retail investors. Adjusting its OpenAI-backed loan reflects a shift in how the tech investment giant manages its leverage and exposure to high-profile AI assets. The bonds will have a face value of 1 million yen each, with an estimated annual interest rate between 4.30% and 4.90%. Detailed terms of the issuance are scheduled to be officially announced on September 4.
## BACKGROUND
Unsecured bonds, also known as debentures, are debt securities that are not backed by physical collateral, relying solely on the creditworthiness of the issuer. In contrast, collateralized loans require the borrower to pledge assets, such as equity shares in a company like OpenAI, which the lender can seize if the borrower defaults.