SoftBank Corp. has instructed a group of banks to organize investor meetings in Asia and Europe to solicit interest in what would be the company’s first euro-denominated bond sale. The outreach to investors began on Wednesday, with the firm seeking feedback on benchmark-sized, fixed-rate senior unsecured euro tranches maturing in six and 10 years.
The mandate has been given to JPMorgan Chase & Co., BNP Paribas SA, Citigroup Inc., and Mizuho to run the investor calls, according to information circulated by the company. The proposed issuance structure is for conventional senior unsecured euro notes issued at benchmark sizes, split across the two maturity buckets noted above.
This potential euro offering arrives as the wider SoftBank corporate group pursues expanded activity in artificial intelligence. The parent company is reportedly exploring up to $40 billion of borrowing in the loan market, with the main purpose of financing its investment in OpenAI. If completed, that dollar-denominated borrowing would be the largest such transaction the parent company has sought.
SoftBank Corp. itself has a relatively recent history in international capital markets. The listed unit, which began trading in 2018 as the mobile arm of the SoftBank Group and has since broadened its remit to include financial services and AI operations, sold its first U.S. high-grade bond last year. That prior transaction totaled $1 billion across five- and 10-year notes, drew demand in excess of seven times the deal size, and priced inside its initial guidance.
The proposed euro bond placement would be structured as fixed-rate senior unsecured tranches at benchmark sizes, and the listed company has targeted investor engagement across both Asia and Europe as part of the initial marketing process.
Summary
SoftBank Corp. has retained JPMorgan, BNP Paribas, Citigroup and Mizuho to conduct investor calls in Asia and Europe for a potential inaugural euro bond offering made up of benchmark-sized, fixed-rate senior unsecured notes maturing in six and 10 years. The initiative coincides with the parent group’s exploration of up to $40 billion in loan market financing, primarily to support its investment in OpenAI. SoftBank Corp. previously issued a $1 billion U.S. high-grade bond last year that was oversubscribed by more than seven times and priced inside guidance.
Key points
- Banks mandated: JPMorgan Chase & Co., BNP Paribas SA, Citigroup Inc., and Mizuho to arrange investor roadshows in Asia and Europe - impacts debt capital markets and banking syndication activity.
- Planned issuance: Benchmark-sized, fixed-rate senior unsecured euro tranches with six- and 10-year maturities - relevant to bond investors and euro-denominated corporate debt markets.
- Parent financing push: SoftBank Group exploring up to $40 billion in loan-market borrowing, primarily to fund its OpenAI investment - significant for loan markets and corporate financing conditions.
Risks and uncertainties
- Market reception - The euro bond offering depends on investor demand across Asia and Europe; weak demand could affect pricing or deal execution, affecting debt capital markets and investor allocations.
- Financing scale - The parent company’s exploration of up to $40 billion in loan-market borrowing represents large-scale funding that could be sensitive to market conditions and lender appetite, impacting loan syndication and leveraged financing markets.
- Timing and execution - The outcome and terms of any euro issuance or the parent’s loan-market activity are contingent on the marketing process and subsequent decisions, introducing execution risk for corporate borrowers and fixed-income investors.