3 weeks ago

SoftBank secures $10 billion margin loan backed by OpenAI stake

SoftBank is a huge company that invests in other businesses.

It has put a lot of money into OpenAI, a big US technology company that works on artificial intelligence.

SoftBank wanted to borrow ten billion dollars, which is an enormous amount of money.

To make the lenders feel safe, SoftBank promised that its ownership stake in OpenAI could back the loan.

Several big banks, including Goldman Sachs and JPMorgan Chase, agreed to lend the money for two years.

SoftBank plans to take the money out this month.

It says the money will be used for general business purposes, including its investment fund Vision Fund II-2.

There is a special rule: if the value of OpenAI's shares drops sharply, SoftBank may need to hand over cash or pay the loan back early.

This new loan follows a different, record-sized forty billion dollar loan SoftBank got for its OpenAI investments.

SoftBank is clearly making a big bet on artificial intelligence.

Key facts

Loan amount: $10 billion
Loan type: Margin loan backed by SoftBank's stake in OpenAI
Term: Two years
Mandated lead arrangers: Goldman Sachs Bank USA, JPMorgan Chase Bank NA, Mizuho Securities USA LLC, Apollo Global Funding LLC, Sumitomo Mitsui Banking Corp.
Guarantor: SoftBank Group Corp.
Purpose: General corporate purposes for SoftBank and Vision Fund II-2
Drawdown: Planned this month
Prior related facility: Record $40 billion bridge loan for OpenAI investments, syndicated to 21 additional lenders last month

livemint.com · 3 weeks ago