SoftBank Group’s five-year credit default swaps rose to about 384.6 basis points, their highest since 2023, as traders assessed risks tied to OpenAI, one of the Japanese investment company’s largest investments.

SoftBank has committed to invest US$64.6 billion in OpenAI.

OpenAI is in early talks with investors for a funding round that could value the company at more than US$1.2 trillion ahead of an initial public offering. However, chief executive Sam Altman said an IPO will not happen this year.

Bloomberg Intelligence credit analyst Sharon Chen said SoftBank’s funding costs are rising.

She added that the company’s offshore bonds are trading at wider spreads because of supply concerns and its growing exposure to OpenAI. Chen also said a delayed IPO could postpone SoftBank’s ability to turn its OpenAI stake into cash.

SoftBank recently raised 1 trillion yen (US$6.45 billion) through a retail bond sale in Japan and is preparing for a potential overseas bond sale.

🔗 Source: Bloomberg

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