"SoftBank is seeking a $10 billion margin loan backed by its OpenAI shares at SOFR + 425 basis points (~7.88%), a two-year term with one-year extension. The loan sits atop a $40 billion bridge loan from March and brings SoftBank's total OpenAI commitment to ~$64.6 billion for a ~13% stake."
"At OpenAI's $852 billion valuation, the stake is notionally worth ~$110 billion, but S&P has downgraded SoftBank's outlook to negative (BB+) and the company faces a $32 billion funding gap over two years."
"SoftBank is borrowing against paper wealth in a private company to fund more investment in the same private company, a recursive leverage structure that works brilliantly until it does not."
"The $10 billion margin loan sits on top of a $40 billion bridge loan underwritten by major banks, earmarked for a $30 billion follow-on investment in OpenAI and general corporate purposes."
SoftBank is seeking a $10 billion margin loan secured by its OpenAI shares, with a two-year term and an interest rate of about 7.88%. This loan adds to a previous $40 billion bridge loan, bringing SoftBank's total commitment to OpenAI to around $64.6 billion for a 13% stake. Despite OpenAI's high valuation, SoftBank faces a negative outlook from S&P and a significant funding gap. The structure of borrowing against private company shares raises concerns about sustainability.
Read at TNW | Investors-Funding
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