Apollo Discusses Raising SoftBank Loan to $9 Billion
Apollo Discusses Raising SoftBank Loan to $9 Billion
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Key Points
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Apollo first arranged the Vision Fund 2-backed NAV loan in 2021 and increased it by $900 million last year, bringing the facility to $5.4 billion.
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SoftBank’s credit-default swaps reached a three-year high, indicating that the cost of insuring against a default on its debt has risen as investors scrutinize its AI-related borrowing.
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SoftBank said it would repay the remaining $25.9 billion on a separate $40 billion loan used to finance its OpenAI investment; the unsecured borrowing was originally scheduled to mature in March 2027.
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SoftBank shares fell as much as 13% in one day around the announcement of the new financing, their steepest single-day decline since July 17, underscoring public-market concern about the scale of its OpenAI exposure.
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Vision Fund 2 has made more than 300 investments, and its committed capital exceeded $100 billion as of February; the fund has recently directed more capital toward OpenAI.
Apollo Global Management is in talks to nearly double a loan to SoftBank, potentially raising a net-asset-value facility from $5.4 billion to $9 billion. The additional borrowing would help SoftBank fund its massive $64.6 billion investment in OpenAI, which would give the Japanese conglomerate roughly a 13% stake Newsquawk.
SoftBank is aggressively borrowing against its investment assets to finance AI bets. The move comes as credit-default-swap costs hit three-year highs, signaling investor worry about the company's mounting debt exposure Newsquawk.
Apollo Loan Growth Fuels OpenAI Bet
Apollo first created the Vision Fund 2-backed NAV loan in 2021. Last year, Apollo increased the facility by $900 million to $5.4 billion Newsquawk. Now discussions are underway to push it as high as $9 billion — a 67% jump. The exact amount has not been finalized, and neither Apollo nor SoftBank has publicly commented.
The loan is collateralized by assets held in SoftBank's Vision Fund 2, which has made over 300 investments with more than $100 billion in committed capital. Recent capital flows have increasingly tilted toward OpenAI as SoftBank doubles down on AI Newsquawk.
Rising Debt Costs Signal Market Concern
SoftBank's credit-default swaps — a measure of debt-default risk — hit three-year highs. This signals that investors are charging more to insure against SoftBank defaulting on its debt Newsquawk. The rise reflects growing unease about the company's AI-related borrowing spree and concentrated OpenAI exposure.
SoftBank shares fell as much as 13% in a single day when the new financing was announced — the steepest one-day drop since July 17 Newsquawk. The decline underscores public-market skepticism about the scale of its OpenAI bet and reliance on leverage to fund it.
SoftBank Assembles Massive Borrowing Arsenal
Beyond the Apollo loan, SoftBank recently secured an $11.87 billion two-year facility from roughly 20 banks Newsquawk. The company also taps an existing $10 billion margin facility backed by its OpenAI stake. Together, these credit lines form a towering borrowing foundation for the OpenAI investment.
SoftBank also issued over $10 billion in bonds to fund the OpenAI deal Newsquawk. The company said it would repay the remaining $25.9 billion on a separate $40 billion loan originally scheduled to mature in March 2027 Newsquawk. The refinancing shuffle shows how heavily SoftBank is leveraging itself to bankroll one bet.
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