Shares slipped 2.9% to $40.00 as SoftBank disclosed it had pushed its Arm-backed borrowing facility to $25 billion — a $5 billion increase renegotiated with creditors this month. The move underscores a core tension: Masayoshi Son's conglomerate is borrowing against its best asset to fund a sprawling AI strategy whose returns remain years away, and the market is starting to price that risk more aggressively.
The Borrowing Keeps Growing, and It All Rests on Arm's Stock Price
A margin loan is borrowing secured by an asset's market value — SoftBank gets cash without selling Arm stock, but its funding is now tied to Arm's daily price swings.
These loans come with collateral limits, meaning a sharp drop in Arm could shrink available borrowing or force SoftBank to post more collateral, triggering fast deleveraging even if the company would prefer to wait.
Arm's stock has surged 142% year-to-date , which makes the math work today — but a reversal would cascade directly into SoftBank's liquidity.
A $65 Billion OpenAI Bet With No Near-Term Exit
SoftBank is slated to invest close to $65 billion in OpenAI by October, funded in part by loans.
The strain intensified after Sam Altman told Fortune that OpenAI won't IPO this year , with the company now leaning toward a 2027 listing. That delays the most obvious path for SoftBank to recoup capital — an IPO that would let it sell or borrow against publicly traded OpenAI shares. SoftBank's credit-default swaps — essentially insurance against a borrower defaulting — hit a three-year high , a clear sign bond-market traders are worried.
Debt Is Stacking Up at Junk-Bond Rates
Unlike big tech firms tapping debt markets, SoftBank's credit profile is weaker: it is rated BB+ by S&P, the highest speculative-grade rating, while Alphabet and Amazon carry AA+ and AA ratings respectively.
In April 2026, SoftBank paid an 8.5% coupon on part of a $3.6 billion bond sale , and now it is meeting with fixed-income investors in New York to gauge appetite for a $10–$20 billion junk-bond deal that could launch as early as next week.
Why This Matters for Shareholders SoftBank's equity is increasingly a leveraged bet on two prices: Arm's stock and OpenAI's private valuation. S&P has warned it could downgrade SoftBank's rating within six to 12 months , which would raise borrowing costs further. If Arm stumbles or OpenAI's IPO slips again, the cascade from margin calls to forced selling could make today's 2.9% drop look modest.