SoftBank has completed the largest junk bond offering on record, raising the equivalent of $11.1 billion, including €1 billion in euro-denominated bonds, as part of its ongoing funding for investments in artificial intelligence. The Japanese technology group’s recent bond sale, which bears yields of up to 9.75 percent, is intended to help finance the third tranche of its substantial investment in OpenAI, expected to conclude next month.

The deal surpasses the $10 billion high-yield bond issuance made by Numericable, a French cable operator, in 2014, setting a new benchmark for riskier debt markets. Analysts and bankers involved in the transaction highlighted that the successful offering reflects investors’ continued appetite for financing the AI sector despite mounting concerns over the rapidly growing debt levels within the industry.

Satoru Aoyama, an analyst at Fitch Ratings, noted that the market is shifting beyond traditional investment-grade borrowing by major technology companies and private credit lenders, moving into a high-yield phase exemplified by SoftBank’s landmark bond sale. Fitch has assigned a BB+ credit rating to SoftBank, categorizing it as the highest tier of non-investment grade.

The offering was led by Citi and largely targeted U.S. institutional investors, including asset managers and passive funds aiming to maintain exposure in high-yield bond indices. According to sources familiar with the deal, demand for the bonds was three to four times greater than the amount issued, underscoring strong investor interest.

Bankers involved said the premium yields on the bonds were influenced by several factors: the sharp increase in U.S. Treasury rates throughout the year, the unprecedented size of the issuance, market uncertainty about the long-term prospects of the AI sector, and SoftBank’s significant exposure to OpenAI.

SoftBank’s net debt stood at ¥10.8 trillion at the end of June, reflecting substantial borrowing to support the vision of founder Masayoshi Son. Despite volatility, the company’s share price has risen approximately one-third over the past year. The firm maintains its loan-to-value ratio at 25 percent under normal market conditions, adhering to its internal risk limits.

The recent bond issuance is part of SoftBank’s strategy to convert short-term bridge financing into longer-term debt. Earlier this month, SoftBank said it would repay $25.9 billion remaining on a $40 billion bridge facility originally used to finance its OpenAI investment. Alongside the record junk bond sale to global investors, the company also issued a record amount of bonds denominated in yen to retail investors in Japan.

This development underscores SoftBank’s aggressive approach to capitalizing on the AI investment boom while navigating the challenges posed by elevated borrowing costs and market uncertainties surrounding the sector’s growth trajectory.