Masayoshi Son's SoftBank To Raise $1.86B Through Bond Issuance For AI Investment And Debt Repayment

Japanese multinational conglomerate SoftBank Group Corp. (OTC:SFTBY) has announced its intention to issue bonds worth approximately $1.86 billion. The proceeds will be directed towards the repayment of existing debt and a strategic shift towards artificial intelligence (AI) investments.

What Happened: SoftBank plans to issue $900 million in U.S. dollar-denominated bonds and 900 million euros ($962.8 million) in euro-denominated bonds, both in two tranches, CNBC reported on Friday. The interest rates for these bonds will range from 5.4% to 7% per annum.

The funds raised will be used for “repayment of indebtedness and for general corporate purposes.”

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The decision to raise funds through debt comes as SoftBank’s financial losses begin to narrow, following some successes including the initial public offering of chip designer Arm.

Simultaneously, SoftBank, through its Vision Fund, has hinted at increasing investments in AI companies. Masayoshi Son, founder and CEO of SoftBank, recently discussed a concept he termed artificial super intelligence (ASI), which he expects to exist within the next decade.

Why It Matters: SoftBank’s move to issue bonds comes on the heels of a recent announcement by Son about the company’s intent to make a significant investment in AI. This decision aligns with SoftBank’s strategic focus on AI, as evidenced by its planned investment in Perplexity AI, a Jeff Bezos-backed AI startup. This investment, part of a larger $250 million funding round, is set to bolster SoftBank’s AI portfolio.

Recently, SoftBank’s announcement to introduce an AI-powered medical service jointly with U.S. healthcare company Tempus AI Inc. (NASDAQ:TEM) in Japan sent Tempus’ stock to surge nearly 3% in pre-market hours trading.

The bond issuance is likely an attempt to capitalize on the improving investor sentiment towards the company, underscored by a 65% year-to-date rise in its shares.

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Photo by NP27 on Shutterstock.

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari