SoftBank is set to conduct a historic retail bond sale in Japan, aiming for $6.3 billion.

      SoftBank is set to make a record retail bond offering of 1 trillion yen, approximately $6.3 billion, marking the largest such sale by any issuer in Japan, to finance its investment commitments to OpenAI. Analysts indicate that banks are hesitant to take on this risk, resulting in the deal relying heavily on retail investors.

      The company has identified Japanese households as its final lender for its AI initiative. The proposed ¥1 trillion retail bond sale is anticipated to provide funding for SoftBank’s pledges to OpenAI.

      The bond terms are designed to be attractive. These seven-year bonds are expected to be priced on September 4th, with an indicative coupon ranging from 4.3% to 4.9%. SoftBank expects to achieve an A rating from the Japan Credit Rating Agency.

      However, international rating agencies have a different assessment. S&P has rated SoftBank at BB+, which is one level below investment grade, having upgraded its outlook to stable from negative in July.

      The shift towards retail funding is not due to enthusiasm. Yuuki Fukumoto from NLI Research Institute noted, “Banks are struggling to take on the risk due to weak deposit growth, the credit rating, and the seven-year term, making the deal increasingly reliant on retail investors.” This trend has already compelled Oracle to seek support from sources outside the banking sector.

      This has become a regular occurrence. This marks SoftBank’s third retail bond issuance of the year, following ¥418 billion raised in April and ¥260 billion in June.

      Even with the ¥1 trillion, the funding gap remains significant. Sharon Chen from Bloomberg Intelligence states that a shortfall exceeding $20 billion persists after this bond issue, indicating that offshore issuance is likely in the near future.

      The financial commitments involved are substantial. SoftBank has committed over $60 billion to OpenAI and is also pursuing a $10 billion margin loan secured against its stake in the company.

      Many companies are simultaneously raising funds. Alphabet, Meta, Microsoft, and Amazon have collectively pledged nearly $2.4 trillion to AI-related investments, while Alibaba secured around $10 billion in Hong Kong on Monday for chips and data centers.

      A European issuer would face challenges doing this in a similar manner. Bond prospectuses throughout the EEA typically include prohibitions on retail investor sales, due to PRIIPs regulations requiring a key information document that most issuers choose not to provide.

      This situation contrasts with what Brussels aims to achieve. The Savings and Investments Union, enacted in March 2025, aims to direct part of the €10 trillion held by European households—about 70% of which is in bank deposits—into capital markets, even as Masayoshi Son dismisses bubble concerns as absurd.

      Japan has now demonstrated what mobilized savings look like in action, with retail savers funding a seven-year investment in a company that remains uncertain about the future profitability of the technology.