SoftBank's credit risk rises to highest in nearly four years; shares halve from June peak amid AI financing pressure

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SoftBank's credit risk soars to highest in nearly four years! AI financing intensifies pressure; shares halve from June high

Cailianshe Zhou Ziyi Editor Lin Qi 2026-10-20 15:36

① Affected by AI-related financing and a potential large-scale acquisition plan, SoftBank Group's credit risk has climbed to its highest level in nearly four years; ② The company's five-year credit default swap rate reached 432 basis points, a new high since early November 2022; ③ SoftBank's share price has plunged about 50% from its June high.

Cailianshe, October 20 (Editor Zhou Ziyi) — Amid concerns triggered by artificial intelligence (AI)-related financing and a potential large-scale acquisition plan, the credit risk of Japan's SoftBank Group climbed on Monday (October 19) to its highest level in nearly four years.

The company's five-year credit default swap (CDS) rate reached 432 basis points, a new high since early November 2022.

A week earlier, the indicator had just broken through 400 basis points, and then surged by more than another 30 basis points. In addition, SoftBank's share price has also been weak recently, plunging about 50% from its June high.

Concerns over financial soundness

The surge in SoftBank Group's credit risk reflects heightened market concerns about its financial soundness, especially against the backdrop of the company's aggressive investment in the AI field and a possible large-scale acquisition.

Since the start of this year, SoftBank has been issuing large amounts of debt to support its AI rollout, with the largest single project being OpenAI; SoftBank's total investment in OpenAI amounts to about $64.6 billion. As of early October 2026, this investment accounted for about 13% of OpenAI's shares.

To raise the funds needed for the final stage of its investment in OpenAI, SoftBank issued a record total of $11.1 billion in high-yield bonds on September 24, 2026, and the coupon rates on this issuance were extremely high. The coupon rates on dollar bonds of different maturities were 8.625%, 9.25% and 9.75%, respectively, with the highest tier described as being at a historic high.

In addition to OpenAI, SoftBank's investment strategy implemented through debt financing also includes: $5.4 billion invested in ABB's robotics business, and $3.1 billion invested in DigitalBridge — the latter is closely related to SoftBank's goals in the data center sector.

As an important player in the financial services sector, SoftBank Group is a diversified financial services company with a current market value of $254.15 million, and has long been actively involved in various investment activities, with a focus on technology and artificial intelligence. However, the company's recent difficulties highlight the volatility and risk associated with its investment strategy, especially as it seeks to balance growth pursuit with financial prudence.

The rise in SoftBank's credit default swap rate shown by the latest data indicates that investors are cautious about its ability to repay debt and meet its debt obligations, especially given the sharp decline in its share price.

This situation has also raised questions about the sustainability of SoftBank's business model and whether it has the ability to cope with the evolving technology investment environment.

Global Market Intelligence

Japan and South Korea stock market developments

Cailianshe statement: The content of this article is for reference only and does not constitute investment advice. Investors who act on it do so at their own risk.

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SoftBank's credit risk rises to highest in nearly four years; shares halve from June peak amid AI financing pressure

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