As OpenAI delays its initial public offering, the window for SoftBank to cash out its stake is likely to be pushed further out, intensifying pressure in the credit market.
According to CMA data reported by Bloomberg on September 16, SoftBank's five-year credit default swap (CDS) traded near 384.6 basis points, reaching its highest level since 2023. At the same time, OpenAI is in preliminary talks with investors over a new funding round that could value the company at more than $1.2 trillion.
OpenAI CEO Sam Altman has previously stated that the highly anticipated IPO remains in progress but will not happen this year. Bloomberg Intelligence credit analyst Sharon Chen noted that the delayed listing means SoftBank's ability to sell its OpenAI stake and recover investment capital may be postponed even further, while rising financing costs are adding to SoftBank's debt burden.
Widening CDS spreads and delayed IPO weigh on SoftBank's funding and exit plans
In a report on Wednesday, Sharon Chen said SoftBank's "financing costs are on the rise," with its offshore bond spreads also widening significantly amid supply concerns and growing exposure to OpenAI.
SoftBank has committed $64.6 billion to OpenAI, marking one of its largest single investments to date. With OpenAI's valuation continuing to climb but its IPO timeline remaining unclear, there is considerable uncertainty over when SoftBank can monetize part of its stake through a public listing.
Meanwhile, SoftBank continues to actively raise funds through the bond market. The company recently completed a ¥1 trillion retail bond issuance in Japan and is preparing for a potential offshore bond sale. However, higher CDS levels indicate that the market is demanding a greater credit risk premium from SoftBank, which could pressure the pricing conditions of future debt financing.
For SoftBank, the expanded OpenAI investment and delayed IPO mean longer capital lock-up and postponed stake monetization, with the shift in credit market pricing reflecting investor concern over these developments.