SoftBank CDS hovers near 3-year high on OpenAI funding concerns

SoftBank Group Corp.’s credit default swaps hovered near a three-year high as traders assessed potential implications from funding plans for OpenAI, one of SoftBank’s biggest bets.

The five-year CDS were indicated around 383.2 basis points, near the highest level since 2023, according to data provider CMA.

SoftBank has committed to invest $64.6 billion in OpenAI. The ChatGPT creator is holding early talks with investors about a fresh funding round that would value it at more than $1.2 trillion ahead of an initial public offering. OpenAI Chief Executive Officer Sam Altman told Fortune earlier the company’s long-anticipated IPO is still in the works but would not happen this year.


“Funding costs are rising,” Bloomberg Intelligence credit analyst Sharon Chen wrote on Wednesday, adding that SoftBank’s offshore bonds are trading at wider spreads amid supply concerns and growing exposure to OpenAI. She added that the delayed IPO could postpone SoftBank’s ability to monetize its OpenAI stake.

SoftBank recently raised ¥1 trillion through a retail bond in Japan and is also preparing for a potential overseas bond sale. Wider CDS spreads could weigh on the terms of future debt sales.

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