SoftBank expands debt firepower for AI push

SoftBank Group has moved to significantly increase its near-term financing capacity as it steps up investments in artificial intelligence. The company recently renegotiated a margin loan secured by shares of its chip unit Arm Holdings (ARM), raising the total size of that facility by $5 billion to $25 billion. The revised terms were agreed and signed with creditors this month, giving SoftBank a larger pool of secured funding tied to one of its most valuable assets.

In parallel, SoftBank has enlarged an existing revolving credit line by securing an additional $450 million, taking that facility to $6.5 billion. The expansion also extends the period during which the company can draw on the credit line by about one year beyond its previous expiry date this month, providing added flexibility for future funding needs.

The updated $6.5 billion revolving credit facility is backed by a syndicate of more than 20 banks, underscoring the breadth of SoftBank’s lender relationships. The new money portion carries an interest margin of 210 basis points over the Secured Overnight Financing Rate, reflecting current conditions in short-term institutional lending.

While the facility size and terms are now in place, it is not known whether SoftBank has drawn on the credit line or intends to do so. A company representative declined to comment on the financing moves, leaving open how and when the enlarged capacity might be deployed.

The increase in the Arm-backed margin loan to $25 billion deepens SoftBank’s use of equity in its chip subsidiary as collateral. By renegotiating the loan and expanding its size by $5 billion, SoftBank has secured additional borrowing capacity linked directly to the market value of Arm shares.

This larger facility adds to the company’s toolkit for funding investments and managing its capital structure. The use of Arm stock as security reflects Arm’s central role within SoftBank’s portfolio at a time when demand for semiconductor and AI-related exposure remains elevated.

Alongside the loan and credit line changes, SoftBank has been meeting fixed-income investors in New York to test appetite for a possible high-yield bond sale. Discussions have centered on a potential offering in the range of $10 billion to $20 billion, which would add another layer of debt financing if executed.

A transaction could come to market as early as next week, depending on investor demand and market conditions. The outreach to high-yield buyers suggests SoftBank is actively exploring multiple channels to raise capital as it expands its commitments in artificial intelligence-related ventures.