Masayoshi Son to Issue Record 1 Trillion Yen Bonds for SoftBank, Eyes Physical AI Investments

Plans to Acquire ABB’s Robotics Division

Record-Breaking Corporate Bond Issuance Targeting Japanese Retail Investors

Masayoshi Son, Chairman of SoftBank Group Japan. Yonhap News.

As competition for investment in artificial intelligence (AI) intensifies, Masayoshi Son, Chairman of SoftBank Group, is moving to issue company bonds aimed at individual investors worth 1 trillion yen (approximately 880 billion yen), which would be the largest issuance of its kind by a Japanese company in history.

According to Nikkei Asia and other sources on the 18th, SoftBank Group is preparing its third corporate bond issuance this year, following those in April and June. The planned issuance will be a seven-year bond targeted at individual investors, with specific conditions such as interest rates to be determined in early September.

The planned value of 1 trillion yen marks the largest ever for a Japanese corporate bond aimed at individual investors. Including issuances to institutional investors, this is on par with the 1 trillion yen bond issued by NTT Finance in 2020.

SoftBank Group considers “physical AI,” or AI that controls robots, a core investment area. The funds raised are expected to be used for repaying existing bonds and for investments in AI-related areas, such as acquiring the robotics division of ABB in Switzerland. They may also be used to repay bridge loans borrowed from financial institutions in Japan and the U.S. for additional contributions to OpenAI in the U.S.

The company aims to invest a total of 10 trillion yen by October. A portion of this will be financed through short-term borrowing. The rise in the share price of Arm, a semiconductor design company under the Densha umbrella, has enabled large-scale borrowing. As the net debt ratio compared to holdings decreases, SoftBank Group has additional capacity to increase its debt.

As global competition for AI investment heats up, major tech companies are increasing their corporate bond issuances. This coincides with growing demand for bond investments among individual investors in Japan, due to inflation and rising interest rates.

In addition, as governments worldwide increase defense spending and pursue tax cut policies, sovereign bond issuance is also on the rise, intensifying competition to secure capital in global bond markets. With banks raising fixed deposit interest rates, governments increasing retail sovereign bond issuances, and companies offering high-yield corporate bonds, all are targeting individual investor funds. As a result, competition among financial institutions for Japanese household capital is expected to remain fierce for the time being.

This content was produced with the assistance of AI translation services.