SoftBank Group’s five-year credit-default swaps reached 432 basis points on October 20, their highest since early November 2022, according to Bloomberg-compiled data.

The rise came as investors worried about AI funding needs and a possible acquisition of Allied Universal.

Bloomberg Intelligence analyst Sharon Chen forecast at least US$6 billion in cash outflow for the year ending March 2027.

She said more AI investment would increase funding needs.

An Allied Universal deal would require SoftBank to raise fresh funds and could push its loan-to-value ratio toward its self-imposed 25% ceiling.

SoftBank completed US$40 billion in backing for OpenAI. It also recently sold US$11.1 billion in bonds tied to its OpenAI financing push.

SoftBank is considering a US$18 billion purchase of Allied Universal, a security and facility services company.

US cloud computing provider CoreWeave’s credit-default swaps hit distress levels amid concerns about debt tied to AI investment. SoftBank shares have fallen about 50% from a June high.

🔗 Source: Bloomberg

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