W.042SoftBank’s default-swap price hit its highest since 2022. At OpenAI’s new $1.25T price, its ~13% of OpenAI would be worth more than SoftBank’s market value
The cost of insuring SoftBank Group’s debt for five years rose to as much as 466 basis points on November 6, the most since October 2022, as its shares fell 10.8%, to 59% below June’s record close. The same day OpenAI took $11B of a round it had hoped would bring $30B, at $1.25T. About 13% of $1.25T is $163B; SoftBank’s whole market value was about $128B.
The credit
Buyers of protection paid the most since 2022. SoftBank Group’s five-year credit default swap rose as high as 466 basis points on Friday, November 6, the widest since October 2022, Reuters reported; at 06:53 GMT it stood at 457.5, according to Markit data, a level Reuters said implies a 30.6% probability of default. Bloomberg had reported 432 on October 20, and Reuters about 280 in June: 186 basis points of widening in about five months. Reuters cited fears that Democratic gains in the US midterm elections will slow AI data center building, the debt SoftBank took on at record yields to fund its OpenAI stake, and OpenAI’s delay of its IPO to 2027.
SoftBank has borrowed at what Reuters called record yields to do it. On September 24 it priced about $11.1B of dollar and euro notes, which Reuters called the largest high-yield corporate bond sale on record; the dollar notes carry coupons of 8.625% to 9.75%. It also sold a ¥1 trillion seven-year bond to retail investors at 4.75%. SoftBank says the notes funded the third $10B tranche of its OpenAI investment, paid October 1, and that it has repaid the bridge loan it took out in March. Its loan-to-value ratio was 13.0% at June 30; its policy is to keep it below 25% under normal market conditions, and at most 35% even in an emergency. It reports fiscal second-quarter results on November 10.
SoftBank’s default-swap price, up about 190 basis points since June
SoftBank Group five-year credit default swap spread, basis points, at four points as reported: about 280 in June (Reuters), above 400 in the week of September 21 (Reuters), 432 on October 20 (Bloomberg), and the high of 466 on November 6 (Reuters). Grey bars are approximate. The dates are uneven; this is not a daily series.
The shares
The stock has lost 59% since June. SoftBank Group closed at ¥3,549 on November 6, 10.8% lower on the day, after a 14.4% fall on November 5. It closed at a record ¥8,632 on June 2 and at ¥6,430 on September 30, so it is down 45% since the end of September. With 5.70B shares outstanding, Friday’s price values the company at about ¥20.2T, about $127.6B as reported.
From ¥8,632 in June to ¥3,549
SoftBank Group closing share price, yen, on five dates, with the change from the June 2 record close.
What the OpenAI stake is worth
SoftBank has put $64.6B into OpenAI and says it owns about 13%. That includes $30B paid in three tranches this year at a $730B pre-money valuation, and $34.6B before that. At June 30, before the last two tranches, SoftBank carried the stake at $89.6B against a cost of $44.6B. About 13% of OpenAI at $1.25T is $163B, more than SoftBank’s market value on Friday, which also includes its roughly 90% of Arm and its other holdings, less its debts. The comparison is rough: 13% is approximate, the round’s new shares will dilute it, reports differ on whether $1.25T is before or after the new money, and it sets a private-round price on an illiquid holding against a market value that is net of SoftBank’s debt.
OpenAI’s round came in smaller and lower. Bloomberg reported on September 29 that OpenAI sought at least $30B at about $1.4T, not including the new money. By November 2 the Financial Times had reported the target cut by $10B, to as much as $20B, at $1.25T. On November 6 Bloomberg reported $11B received, 37% of the original target, at a valuation 11% below the $1.4T, and said the round could reach $20B in the coming weeks. Reuters reported SoftBank and MGX took part. $1.25T is still 47% above the $852B post-money value of OpenAI’s March round; W.034 first reported the close.
About 13% of OpenAI at $1.25T is more than SoftBank’s market value
$ billions: SoftBank Group’s market value on November 6 (about ¥20.2T, as reported); about 13% of OpenAI, SoftBank’s stated ownership, at the $1.25T of the November 6 first close and, hypothetically since SoftBank reached about 13% only on October 1, at the $852B post-money value of March; and SoftBank’s cumulative investment in OpenAI. The stake values are our arithmetic and ignore dilution from the new round.
OpenAI sought $30B and has $11B
OpenAI’s fall 2026 round, $ billions, as reported: the target Bloomberg reported on September 29 (at least $30B at about $1.4T before the new money), the reduced target the FT reported in late October (as much as $20B at $1.25T), and the $11B first close Bloomberg reported on November 6, outlined to the $20B the round may reach.
What this changes on 06.ai
- Labs funding pack: OpenAI’s fall round is reported at $11B received of a $30B target, at $1.25T against $1.4T sought; the pack’s OpenAI raise assumptions should take the smaller figure until OpenAI confirms the total.
- Watch SoftBank’s results on November 10 for its loan-to-value ratio at September 30, the carrying value of the OpenAI stake, and any change to its 25% normal-conditions limit.
Sources and method
| Item | Figure | Source |
|---|---|---|
| CDS | Five-year CDS as much as 466 bp, widest since October 2022; 457.5 bp at 06:53 GMT, implying a 30.6% default probability; shares down 10.8%; $64.6B invested in OpenAI; OpenAI IPO delayed to 2027; SB Energy IPO filing | Reuters, via The Star, Nov 6 |
| CDS | 432 bp on October 20, highest since early November 2022; above 400 bp about a week earlier | Bloomberg, via Yahoo Finance, Oct 20 |
| CDS | About 280 bp in June; above 400 bp in the week of the bond sale; $11.1B sale, the largest high-yield corporate bond sale on record | Reuters, via Free Malaysia Today, Sep 24 |
| Shares | ¥3,549 on November 6, −10.83%; market value about ¥20.2T, about $127.6B | Global Banking & Finance Review, Nov 6 |
| Shares | Record close ¥8,632 on June 2 | BreezyScroll |
| Shares | Closes ¥6,430 (Sep 30), ¥4,554 (Oct 20); 52-week high ¥9,074 | Investing.com historical data; StockAnalysis |
| Shares | Down 14.4% on November 5 | Yahoo Finance, Nov 6 |
| Shares | 5,711,848,120 shares issued, 12,924,419 held in treasury | SoftBank Group |
| OpenAI stake | Third $10B tranche paid Oct 1; cumulative investment $64.6B; ownership about 13%; funded from the September notes; bridge loan repaid | SoftBank Group, Oct 1 |
| OpenAI stake | $30B in three tranches at a $730B pre-money valuation; LTV below 25% in normal circumstances | SoftBank Group, Feb 27 |
| Balance sheet | LTV 13% at June 30 (17% at March 31); OpenAI cost $44.6B, fair value $89.6B at June 30 | SoftBank Q1 FY2026 investor presentation |
| Bonds | About $11.1B of dollar and euro notes priced September 24, coupons 8.625% to 9.75% on the dollar notes | SoftBank Group, Sep 24 |
| Bonds | ¥1 trillion seven-year retail bond at 4.75% | Briefs, Sep 2026 |
| Results | Fiscal second-quarter results on November 10 | SoftBank IR calendar |
| OpenAI | At least $30B at about $1.4T, not including the new money | Bloomberg, via Investing.com, Sep 29 |
| OpenAI | Target cut by $10B to as much as $20B at $1.25T; MGX expected to be the largest backer | Tech Funding News, on the FT |
| OpenAI | $11B received at $1.25T; may grow to $20B; it had sought $30B or more at $1.4T | Bloomberg, via Investing.com, Nov 6 |
| OpenAI | SoftBank and MGX took part, per two investors | Reuters, via The Star, Nov 7 |
| OpenAI | $122B committed at $852B post-money, March 31 | OpenAI |
Credit default swap levels are as Reuters and Bloomberg reported them; the June level is approximate. Widening: 466 − 280 = 186. Share price: 3549 ÷ 8632 − 1 = -58.9%; 3549 ÷ 6430 − 1 = -44.8%; 3549 ÷ 3980 − 1 = -10.8%. Market value: (5,711,848,120 − 12,924,419) × 3549 = ¥20.23T; the dollar figure is as reported. Stake: 0.13 × 1,250 = 162.5; 0.13 × 852 = 110.8; 162.5 ÷ 127.6 = 1.27. Before this year: 64.6 − 30 = 34.6. Round: 11 ÷ 30 = 36.7%; 1,250 ÷ 1,400 − 1 = -10.7%; 1,250 ÷ 852 − 1 = 46.7%. Reuters’ November 6 report gives the original valuation sought as $1.5T; Bloomberg’s reports of September 29 and November 6 give $1.4T, which this post uses. CNBC reported $1.25T as pre-money in October; a later report citing the FT called it post-money.
Wire reports are written within hours of the news, on a six-hour schedule. Each lists its sources and shows the arithmetic behind its figures. Not investment advice.