SoftBank Group Issuer Summary

Report date: 2026-05-13 Issuer: SoftBank Group Corp.（ソフトバンクグループ株式会社） Relevant bond issuer: SoftBank Group Corp. Bond structure reference: Senior unsecured bonds issued by the holding company, foreign-currency senior notes, domestic and overseas hybrid securities, bridge loans, and equity-backed financing

1. Business Snapshot and Recent Developments

SoftBank Group Corp. (“SBG”) is not a domestic telecom carrier, but a strategic investment holding company spanning AI, semiconductors, telecommunications, payments, and fund investments. Credit analysis of SBG debt therefore should not treat SoftBank Corp.’s telecom earnings or Arm’s enterprise value as direct debt-service resources. Repayment resources consist of cash available at the holding-company level, sale or collateralization of listed and unlisted shareholdings, subsidiary dividends, fund distributions, and access to bond and bank markets. Reflecting the FY2025 full-year materials, this report treats SBG not as a “telecom company” but as an investment holding company to be assessed through NAV, LTV, asset flexibility, and refinancing execution capacity.

SBG announced its full-year results for the fiscal year ended March 2026 on May 13, 2026. On a consolidated basis, net sales were JPY 7,798.7 billion, net income attributable to owners of the parent was JPY 5,002.3 billion, and investment gain was JPY 7,286.5 billion. Net income increased sharply from JPY 1,153.3 billion in the prior fiscal year and reached an exceptional level even among Japanese companies. However, the main driver was investment valuation gains, led by OpenAI, rather than recurring earnings from operating companies. Of the USD 44.7 billion FY2025 investment gain recorded by SoftBank Vision Funds, USD 42.1 billion related to OpenAI; accounting profit should not be confused with holding-company free cash.

The central credit metric is LTV. According to company materials, NAV was JPY 40.1 trillion, LTV was 17.0%, and the cash position was JPY 3.5 trillion as of end-March 2026. Compared with NAV of JPY 25.7 trillion, LTV of 18.0%, and a cash position of JPY 3.4 trillion at end-March 2025, LTV improved owing to the expansion in asset value. In relation to the company’s financial policy of maintaining LTV below 25% in normal times, 35% or lower in abnormal times, and liquidity sufficient to cover two years of bond redemptions, the static headroom as of end-March 2026 clearly remains.

However, the end-March 2026 LTV does not fully incorporate the additional OpenAI investment and bridge borrowings executed after April 2026. On February 27, 2026, SBG announced an additional USD 30.0 billion investment in OpenAI, structured to be executed in three USD 10.0 billion tranches in April, July, and October 2026. In April 2026, the first USD 10.0 billion tranche was executed, and in the same month SBG drew a total of USD 20.0 billion from a USD 40.0 billion bridge facility. The FY2025 data sheet shows that USD 2.5 billion had been repaid in April 2026 and that the outstanding balance of the 2026 bridge was USD 17.5 billion as of May 13, 2026. This provides a partial answer to the previously unconfirmed issue at the flash stage regarding the “balance after the foreign-currency bond issuance,” while also showing that a large funding issue remains before the remaining tranches in July and October 2026.

The timing difference needs to be clearly separated. NAV, LTV, and the cash position as of end-March 2026 are static fiscal year-end figures; they are not pro forma LTV figures reflecting the OpenAI first tranche, bridge borrowings, foreign-currency bond issuance, and partial bridge repayment after April 2026. This report presents both the company-disclosed March-end LTV and the May 13 bridge balance, but does not calculate an independent pro forma LTV reflecting all post-April transactions.

The largest change is OpenAI. In December 2025, SBG completed its OpenAI investment based on the March 2025 commitment; as of end-March 2026, cumulative investment cost was USD 34.6 billion, fair value was USD 79.6 billion, and cumulative investment gain was USD 45.0 billion. If the additional 2026 investment is completed as scheduled, cumulative investment amount is expected to reach approximately USD 64.6 billion. OpenAI increases SBG’s NAV upside substantially, while creating a structure in which credit quality depends heavily on the valuation, monetization, additional funding needs, and timing of liquidity events for an unlisted AI company.

On funding, SBG entered into a USD 40.0 billion unsecured and unguaranteed bridge facility on March 27, 2026. The maturity is March 25, 2027, and the purpose is additional investment in OpenAI and general corporate purposes. Securing an unsecured bridge facility of this size demonstrates strong bank access. At the same time, because it is a large short-term facility, replacement with long-term funding during 2026–2027 becomes the most important issue. The April 16, 2026 issuance of foreign-currency senior notes was a partial response: USD tranches totaled USD 1.5 billion, EUR tranches totaled EUR 1.75 billion, and coupons were 7.625–8.500% for USD and 6.375–7.375% for EUR. Market access has been maintained, but funding costs are high.

PayPay listed on the Nasdaq Global Select Market in March 2026 under the ticker PAYP. Net proceeds to PayPay were JPY 94.6 billion, and gross proceeds before expenses to SVF II Piranha were approximately JPY 57.8 billion. PayPay remains an SBG subsidiary after the listing and is not an immediate large-scale deleveraging item, but the listing created a market price reference point and future sale optionality.

The AI strategy has become more asset-heavy. The acquisition of Ampere Computing was completed in November 2025, reinforcing the significance of the AI Computing segment together with Arm. Agreements have been reached to acquire DigitalBridge and ABB’s robotics business, but closing conditions and integration risks remain. These transactions reinforce the concept of connecting AI chips, AI infrastructure, robotics, and services, while increasing upfront investment and execution risk.

2. Industry Position and Franchise Strength

SBG’s franchise should be evaluated not by market share in a single industry, but by the quality of its asset base, capital-allocation capability, and capital-market access. Combining Arm, OpenAI, SoftBank Corp., PayPay, SVF, and remaining assets related to past T-Mobile exposure, SBG has a much thicker asset base than ordinary high-yield issuers. At the same time, much of this asset value depends on equity markets, unlisted AI valuations, fund structures, and secured financing terms. The business franchise is strong, but for bond investors the key question is how freely that value can be converted into cash and in what order it reaches creditors.

Arm is one of the most important listed assets. Its semiconductor IP is widely used in smartphones, data centers, automobiles, IoT, and AI devices, and is central to SBG’s AI and semiconductor strategy. Arm shares have a public market price reference, directly affecting NAV, collateral capacity, and capital-market perception. However, Arm shares are also subject to margin loans. Arm is one of the largest sources of credit enhancement, but as collateralization increases, it also constrains the free assets remaining for unsecured bondholders.

OpenAI has become the unlisted asset with the strongest influence on SBG’s future prospects. If OpenAI maintains leadership in generative AI, enterprise AI, AI agents, APIs, and infrastructure monetization, SBG’s NAV could be lifted significantly. However, transparency of unlisted valuation, the time required for monetization, AI model development, inference and data-center costs, regulation, and competition are major uncertainties. From a credit perspective, OpenAI should be viewed as a “high-value core asset with difficult-to-predict monetization.”

SoftBank Corp. is a stable domestic operating asset and an important pillar in SBG’s credit story. It generates cash flow through domestic telecom, enterprise, media and e-commerce, and financial businesses, and is a source of dividends, equity value, equity-backed financing, and explanatory strength with domestic investors for SBG. However, it is a listed subsidiary with minority shareholders, its own creditors, regulatory constraints, and capex plans. SoftBank Corp.’s strength supports SBG debt, but it is not a guarantee.

PayPay’s listing increased valuation transparency and liquidity optionality, but its growth investment needs and role within the SoftBank Corp. and LY ecosystem are also significant. It should not be viewed as a simple disposal candidate, but rather as a listed growth asset that expands future capital-policy optionality.

SBG’s capital-market franchise is also strong. SBG can combine domestic straight bonds, domestic hybrids, foreign-currency seniors, foreign-currency hybrids, bank loans, bridge facilities, equity-backed loans, and asset sales. It has continued to execute large-scale issuance and bridge financing through 2025–2026. However, as shown by the coupon levels on the April 2026 foreign-currency bonds, SBG pays a meaningful credit premium in international markets as a BB+ holding company. Not only the existence of access, but also the price of that access, is directly relevant to the credit assessment.

3. Segment Assessment

Each segment should be assessed not by operating profit, but by value, monetizability, collateralization, and legal distance from the perspective of SBG creditors.

The combination of Arm and OpenAI best illustrates SBG’s current direction. In the Investor Briefing, the two represented a large share of the value of holdings as of March 2026, with the portfolio’s center of gravity shifting further toward AI. Arm offers pricing transparency and collateral value, while OpenAI has large growth potential but low monetizability. SoftBank Corp. and PayPay supplement domestic ecosystem exposure and stability, while SVF and the other portfolio provide asset-reallocation optionality, though distribution structures and unlisted valuations are complex.

The 2025 asset-sale record demonstrates the effectiveness of LTV management. SBG received USD 12.73 billion from the sale of T-Mobile shares, USD 2.74 billion from transactions and sales related to Deutsche Telekom shares, and USD 5.83 billion from the sale of NVIDIA shares. This is a significant credit support factor, but the post-sale asset mix also needs to be assessed because it becomes more concentrated in AI, unlisted assets, and collateralized assets. Large sale proceeds are not always equivalent to greater safety; the liquidity and freedom of the remaining assets after disposal are critical.

4. Financial Profile and Analysis

In analyzing SBG’s financial profile, it is important not to treat consolidated profit as a substitute for operating cash flow. FY2025 net income attributable to owners of the parent of JPY 5,002.3 billion is an extremely large figure, but the main driver was investment valuation gains, including OpenAI-related gains. Investment gains lift NAV and strengthen capital-market confidence, but they are not the same as cash immediately available to redeem bonds. For a holding-company credit, accounting profit, NAV, LTV, cash, collateral capacity, and short-term borrowing maturities need to be assessed separately.

LTV of 17.0% is a level with headroom relative to company policy. The concern in the previous summary that additional OpenAI investment could move LTV closer to 25% was contained as of end-March 2026 owing to the increase in Arm and OpenAI valuations. In response to the risk of LTV rising toward the 25% area noted by JCR in its April 30, 2026 release, the full-year materials can be read as showing a near-term buffer. However, the method by which LTV is kept low is not always friendly to unsecured bonds. Asset sales support deleveraging, but secured borrowings increase liquidity while strengthening the structural subordination of unsecured bonds.

The JPY 3.5 trillion cash position supports short-term liquidity. However, this is the company-defined cash position and not simply the balance of cash and deposits. Under the company definition, it includes cash and cash equivalents, short-term investments recorded as current assets, bond investments, and unused borrowing commitments, but the FY2025 presentation notes that borrowing commitments were fully drawn as of end-March 2026. Therefore, the JPY 3.5 trillion should be read not as liquidity containing a large unused line, but as company-defined liquidity after fully drawing the borrowing facility. The decline from JPY 5.8 trillion at FY2025 Q3 to JPY 3.5 trillion reflects the progress of investment execution and capital allocation. March-end cash remains ample, but given the post-April OpenAI investment, bridge borrowing, and foreign-currency bond issuance, the relevant assessment should combine the bridge balance, remaining tranches, collateral capacity, and the next two years of bond redemptions, rather than a simple cash balance.

The expansion of secured financing complicates the quality of the financial profile. In the Investor Briefing’s LTV calculation, asset-backed finance and related adjustment amounts totaled JPY 4.62 trillion at end-March 2026, comprising JPY 3.17 trillion of Arm share margin loans, JPY 1.20 trillion of SoftBank Corp. share margin loans, and JPY 0.26 trillion of prepaid forward liabilities related to T-Mobile shares. Collateralized loans are a rational way to obtain funding without selling assets, but if share prices fall, collateral capacity, additional collateral needs, repayments, and LTV can deteriorate simultaneously.

OpenAI is the center of financial volatility. OpenAI shares are measured quarterly at fair value as FVTPL financial assets, and valuation differences are reflected in profit or loss. If valuation rises, profit and NAV expand materially; if valuation falls, the movement reverses. In addition, OpenAI is unlisted and less monetizable than listed shares. SBG’s credit depends not only on OpenAI’s business growth, but also on how much additional funding SBG contributes and when it can realize liquidity.

OpenAI needs to be assessed by linking investment amount, valuation gain, and funding-execution timing. The P&L-relevant figures for FY2025 are that of the USD 44.7 billion investment gain in SoftBank Vision Funds, USD 42.1 billion related to OpenAI, while the yen-denominated OpenAI-related investment gain was JPY 6,730.4 billion. The balance sheet and NAV-relevant figures as of end-March 2026 are cumulative investment cost of USD 34.6 billion, fair value of USD 79.6 billion, and cumulative investment gain of USD 45.0 billion. The figures relevant to future funding needs after April 2026 are the additional USD 30.0 billion announced in February 2026, consisting of USD 10.0 billion executed in April and planned USD 10.0 billion tranches in July and October. OpenAI is therefore both an asset that has already lifted earnings and an asset that will require further cash.

The important point in this table is that OpenAI affects all three dimensions of SBG’s financial profile at the same time. Higher valuation lifts profit and NAV, but additional investment requires cash or debt, and because OpenAI is unlisted, the timing of sale or collateralization is difficult to predict. For OpenAI to strengthen credit, a high valuation alone is not enough; the quality of the valuation, control of funding needs, and visibility on future liquidity paths need to be evident.

On interest-rate and currency exposure, SBG raises funds in both yen and foreign currencies. In Japan, JCR’s A rating and the distribution base provide support, but in foreign-currency markets SBG pays high yields as an S&P BB+ holding company. The coupon levels on the April 2026 foreign-currency bonds made clear that the cost of capital for advancing AI investment is high. If AI investment does not generate value sufficiently above this cost of capital, interest burden and refinancing risk will pressure credit over the long term.

Overall, SBG’s financial profile improved in FY2025 in terms of asset value and LTV, while its financial quality became more event-sensitive. NAV of JPY 40.1 trillion, LTV of 17.0%, and cash of JPY 3.5 trillion support near-term credit. However, given the additional OpenAI investment after April 2026, the USD 17.5 billion bridge balance, expansion of secured financing, and foreign-currency bond costs, the focus going forward is not only the “level of LTV” but also the “method used to keep LTV low.”

5. Structural Considerations for Bondholders

For SBG creditors, the most important structural issue is that even if the group owns many high-quality assets, their cash flows do not flow directly into holding-company debt. SoftBank Corp., Arm, PayPay, and SVF investees do not guarantee SBG bonds. Repayment resources for SBG standalone bonds are dividends, asset sales, equity-backed borrowing, fund distributions, and refinancing through bond and bank markets, not direct claims on subsidiary operating cash flow.

The practical question for unsecured bond investors is not how large consolidated total assets are, but which assets are collateralized, which assets are unencumbered, and which funding sources can be used for short-term repayment.

Arm is emblematic of the structural issue. Arm is one of SBG’s largest value sources, but its shares are also subject to share-backed loans. If Arm’s share price rises, NAV and collateral capacity increase. If it falls, NAV decline, LTV increase, lower collateral capacity, and higher funding costs can occur in sequence. Unsecured bond investors need to recognize Arm as credit support while incorporating the fact that secured creditors have prior access to the same asset.

SoftBank Corp. share-backed loans raise the same issue. The more stable an asset is, the greater its collateral value and the easier it is to use for financing. However, as collateralization progresses, free assets remaining behind unsecured bonds decline. The JPY 1.20 trillion of SBKK share margin loans as of end-March 2026 demonstrates SBG’s ability to secure liquidity, but also works to reduce asset flexibility at the holding-company level.

In the SVF structure, the distance between investment gains and SBG standalone cash is important. Funds have external investors, preferred distributions, performance-based allocations, taxes, and expenses. Investments through SVF2 such as OpenAI provide SBG with large economic exposure, but accounting valuation gains do not immediately become holding-company free cash.

Hybrid securities are subordinated to senior bonds and provide rating equity credit, giving senior creditors a degree of cushion. The JPY 418.0 billion domestic hybrid bonds decided in April 2026 are to be used for purposes including the first optional redemption of JPY 405.0 billion of existing domestic hybrid bonds. However, hybrid calls, replacement, and coupon deferral depend on issuer market access and rating-agency treatment.

The bridge loan creates dated short-term maturity risk. The USD 40.0 billion bridge is unsecured and unguaranteed, and therefore does not immediately subordinate senior unsecured bonds in terms of collateral. However, USD 17.5 billion remained outstanding as of May 13, 2026, and the maturity of March 25, 2027 is short. Even if unsecured, large near-term bank debt tends to carry high practical funding priority. The focus is how SBG will term it out through asset sales, yen bonds, foreign-currency bonds, secured loans, and hybrids.

Given this structure, analysis of SBG bonds should emphasize SBG standalone net debt, value of holdings, unencumbered listed assets, secured borrowings, bridge balance, and bond redemption schedule rather than consolidated total assets or net income. FY2025 full-year results showed improved NAV and LTV, but the combination of collateralized Arm and SoftBank Corp. shares, the unlisted nature of OpenAI, and the short-term nature of the bridge within the same asset value determines the real protection for unsecured bonds. SBG is complex, but if one organizes “which asset supports which creditor in what order,” the credit support and vulnerabilities become visible.

6. Capital Structure, Liquidity and Funding

SBG’s capital structure is multilayered. The ability to combine domestic yen bonds, foreign-currency senior bonds, domestic and overseas hybrids, bank loans, bridge facilities, share-backed loans, and asset sales is a major strength. At the same time, the more funding tools SBG uses, the more complex creditor ranking, collateral, maturity, currency, interest rates, and rating equity credit become.

The domestic yen bond market is a stable funding source for SBG. JCR’s A rating, brand, retail investor distribution network, and financial-institution relationships provide support. Access to the domestic market is an important strength that distinguishes SBG from a simple international BB issuer. However, a domestic A rating is not synonymous with an international investment-grade profile, nor does it eliminate OpenAI or collateralized-loan risk.

In foreign-currency markets, SBG is assessed by international investors as a BB+ holding company. The April 2026 foreign-currency senior bonds will be used for foreign-currency bond redemptions and partial repayment of the OpenAI bridge. The ability to issue is positive, but the cost of USD 7.625–8.500% and EUR 6.375–7.375% is high. To continue AI investment with foreign-currency funding, asset-value appreciation needs to exceed this cost of capital.

The USD 40.0 billion bridge is the largest funding issue in 2026. Securing it without collateral indicates confidence from the bank group, but the facility has a short maturity. The key is to distinguish total facility size, drawn amount, repayment amount, and outstanding balance. The FY2025 data sheet shows that USD 20.0 billion was drawn in April 2026, USD 2.5 billion was repaid in the same month, and the outstanding balance as of May 13, 2026 was USD 17.5 billion. The April 2026 foreign-currency bond issuance was a partial replacement with long-term funding, but funding for the remaining two tranches and further reduction of the bridge balance remain items for confirmation. The future combination of yen bonds, foreign-currency bonds, asset sales, secured loans, and co-investment needs to be monitored. If the bridge cannot be termed out, refinancing risk toward 2027 will rise.

The short-term liquidity assessment remains strong. The JPY 3.5 trillion cash position as of end-March 2026 is substantial compared with ordinary operating companies and holding companies, and SBG’s funding access has been maintained. Nevertheless, given the post-April OpenAI investment execution and bridge usage, liquidity assessment cannot be completed by looking only at cash balances. The key points are the USD 17.5 billion bridge balance, remaining USD 20.0 billion of OpenAI tranches, collateral capacity, short-term redemptions, use of proceeds after foreign-currency bond issuance, and continued access to the domestic yen bond market.

According to the debt repayment schedule in the FY2025 data sheet, looking only at bonds, FY2026 redemptions are JPY 1,098.5 billion and FY2027 redemptions are JPY 520.9 billion, consisting of domestic senior bonds, domestic hybrids, foreign-currency senior bonds, and foreign-currency hybrids. The total repayment schedule including term loans and bridge loans includes, per company notes, the domestic hybrid bonds and foreign-currency senior bonds issued in April 2026, and assumes hybrid redemption at the first call date. Therefore, the company policy of maintaining a cash position that covers two years of bond redemptions is an important support for liquidity assessment, but in 2026, ordinary bond redemptions need to be assessed together with the OpenAI bridge and the funding arrangements for the remaining tranches.

7. Rating Agency View

SBG’s ratings are viewed differently in domestic and international markets. SBG’s official page showed JCR long-term debt rating of A, short-term rating of J-1, and S&P rating of BB+ as of February 12, 2026. JCR affirmed the long-term issuer rating at A with a Negative outlook and CP at J-1 on April 30, 2026. S&P’s BB+ is positioned in the upper tier of international high yield, while JCR’s A more strongly reflects domestic market funding capacity and investor base.

JCR’s Negative outlook is consistent with the main concerns in this report. JCR noted that cumulative investment in OpenAI, including the 2026 additional investment, is expected to reach USD 64.6 billion, or around JPY 10 trillion, and pointed to the possibility of continued AI-related investments including OpenAI and Stargate. The policy of managing LTV below 25% in normal times is maintained, but the increase in the proportion of unlisted AI-related assets and higher NAV volatility are the reasons for maintaining the Negative outlook.

JCR had summarized the value of holdings at end-December 2025 as JPY 38.98 trillion, SBG standalone adjusted net interest-bearing debt as JPY 8.05 trillion, and LTV as 20.6%. In the FY2025 full-year materials, adjusted SBG standalone value of holdings was JPY 48.26 trillion, adjusted SBG standalone net interest-bearing debt was JPY 8.21 trillion, and LTV was 17.0% as of end-March 2026. Static LTV has therefore improved relative to the timing of the JCR release. This is supportive of the A rating, but the issues flagged by JCR—higher proportion of unlisted AI-related assets, NAV volatility, and funding for additional investment—remain.

Moody’s is not treated as a solicited rating. Moody’s published Ba2 Stable in September 2025, but on the same day SBG objected that it had not obtained a rating from Moody’s and had not provided information to Moody’s since 2020. SBG stated that its current credit ratings are only from S&P and JCR. Therefore, Moody’s exists as an external market reference, but it is not central to this report.

The rating inflection points are maintenance of LTV below 25%, the proportion of unlisted AI assets centered on OpenAI, and progress on bridge term-out. After FY2025 full-year results, the key issue is less the LTV level itself than how SBG will replace the post-April 2026 bridge balance and remaining OpenAI tranches with long-term funding, maintain asset value without excessive collateralization, and execute funding plans. It would be dangerous to treat SBG as a telecom-type stable credit because of the domestic A rating, while focusing only on the international BB+ rating and ignoring the depth of asset value would also be insufficient.

8. Credit Positioning

SBG is neither an investment-grade telecom operating company, a pure private-equity manager, nor an ordinary high-yield operating company. The closest positioning is “a strategic investment holding company with substantial listed and unlisted assets and strong capital-market access, but also concentration investment risk and structural subordination.” Senior bonds are supported by asset value, but not directly by stable operating cash flow.

On the positive side, SBG has higher asset quality and monetization capacity than a typical BB-rated issuer. It owns Arm, SoftBank Corp., PayPay, OpenAI, and the SVF portfolio, and has strong access to the domestic yen bond market and bank groups. NAV of JPY 40.1 trillion, LTV of 17.0%, and a cash position of JPY 3.5 trillion as of end-March 2026 support near-term credit.

On the negative side, risks include concentration in OpenAI, unlisted valuations, the bridge balance of USD 17.5 billion as of May 13, 2026, secured loans, and the high cost of foreign-currency bonds. If SBG is bought as a high-spread name in the telecom sector, the actual exposure being taken is not telecom risk but AI investment holding-company risk. Because live spreads have not been verified, this report does not provide a buy/sell recommendation, but the spread required by investors should include compensation for LTV, collateralization, the bridge, OpenAI valuation, and foreign-currency market access.

Senior bonds and hybrids should also be considered separately. Senior bonds are supported by asset value and liquidity. Hybrids are subordinated and carry coupon deferral and call-extension risk, while also providing rating equity credit to the issuer. During periods of AI investment and rising LTV, hybrid price volatility is likely to be larger than that of seniors.

9. Key Credit Strengths and Constraints

The first key strength is the quality and scale of SBG’s holdings. Arm is a global semiconductor IP asset with high strategic importance in the AI compute era. SoftBank Corp. is a stable domestic operating asset. PayPay has become a listed growth asset. OpenAI is unlisted and subject to substantial uncertainty, but the NAV upside if successful is very large.

The second strength is financial policy and liquidity. The policies of maintaining LTV below 25% in normal times, 35% or lower in abnormal times, and a cash position covering two years of bond redemptions are clear, and LTV of 17.0% and a cash position of JPY 3.5 trillion as of end-March 2026 are within those policies. The third strength is capital-market access, allowing SBG to combine domestic and overseas bonds, hybrids, bank loans, secured loans, and asset sales. The fourth strength is asset-reallocation execution, as seen in the sales of T-Mobile, Deutsche Telekom, and NVIDIA, and the PayPay listing.

The largest constraint is concentration in OpenAI and AI-related assets. OpenAI could hold substantial value, but as an unlisted company, uncertainty remains around monetization, funding needs, and valuation. The second constraint is structural subordination and collateralization. Using high-quality assets such as Arm and SoftBank Corp. as collateral increases liquidity, but reduces free assets remaining for unsecured bonds. The third constraint is the short-term nature of the USD 40.0 billion bridge, with USD 17.5 billion still outstanding as of May 13, 2026. The fourth is bold founder-led capital allocation and key-person risk. The fifth is high sensitivity to interest rates, foreign exchange, equity markets, and AI valuations.

SBG’s strengths and constraints arise from the same root. Bold investment enables large exposure to Arm and OpenAI, while also creating funding needs. Secured loans create liquidity, while also creating structural subordination. This duality is the core of SBG credit analysis.

10. Downside Scenarios and Monitoring Triggers

SBG’s downside scenarios are likely to arise not from weakness in a single operating business, but through a chain reaction involving asset value, funding, collateral, and ratings.

The clearest early warning indicator is LTV. The 17.0% level as of end-March 2026 is sound, and a temporary move above 25% would not necessarily be an immediate problem. However, if LTV remains above 25% and there is no visible asset sale or investment restraint, the risk that the JCR Negative outlook materializes would rise. The 35% level is the upper limit in abnormal times, and the market would likely react before SBG approaches that level.

The bridge loan is a dated risk. Toward the March 25, 2027 maturity, the key issue is how much can be replaced with long-term funding during 2026. The April 2026 foreign-currency bonds and USD 2.5 billion repayment were progress, but the USD 17.5 billion balance as of May 13, 2026 remains large. The future combination of foreign-currency bonds, yen bonds, asset sales, PayPay share monetization, secured loans, and co-investment should be monitored.

For OpenAI, monitoring should cover not only valuation, but also monetization, cash burn, infrastructure investment, enterprise AI penetration, and additional funding needs. For SBG creditors, the key issue is not only whether OpenAI grows, but also how much additional funding SBG is required to provide.

The worst-case pattern would be a simultaneous decline in AI-related asset values and deterioration in capital markets. NAV decline, LTV increase, shrinking collateral capacity, higher bridge term-out costs, and weaker asset-sale prices could compound each other. Because SBG has multiple funding channels, the probability of an immediate short-term liquidity crisis is limited, but spread widening and rating pressure would be likely to intensify.

11. Credit View and Monitoring Focus

As of May 13, 2026, SBG’s credit quality has sufficient near-term repayment capacity and is supported by a thicker asset base than an ordinary BB-rated issuer. The credit direction improved somewhat when viewed only from the static end-March 2026 position, because FY2025 full-year materials confirmed NAV of JPY 40.1 trillion, LTV of 17.0%, and a cash position of JPY 3.5 trillion. However, that improvement has not suddenly transformed the credit into a stable profile. Given the additional OpenAI investment after April 2026, the bridge balance of USD 17.5 billion as of May 13, 2026, secured financing, Arm’s share price, and foreign-currency bond markets, the credit view can still move up or down over a short period. SBG should therefore not be viewed as a “weak credit,” but neither is it a telecom-type stable credit; it should be treated as an event-sensitive holding-company credit supported by asset value and market access.

The credit-supportive factors are clear. Arm, SoftBank Corp., PayPay, OpenAI, and the SVF portfolio provide an asset-value cushion that ordinary high-yield issuers do not have. In FY2025, the value of holdings increased, led by Arm and OpenAI, and LTV improved to 17.0%. Funding flexibility is also strong, as SBG can combine domestic yen bond markets, bank groups, foreign-currency bond markets, hybrids, asset sales, and share-backed loans. The track record of asset sales and liquidity events related to T-Mobile, Deutsche Telekom, NVIDIA, and PayPay demonstrates an ability to monetize assets when needed and manage LTV.

However, credit stability is lower than before. OpenAI investment is becoming central to SBG’s enterprise value and credit assessment, and valuation changes in unlisted AI assets can materially move NAV, profit, and LTV. OpenAI’s fair value of USD 79.6 billion and cumulative investment gain of USD 45.0 billion as of end-March 2026 significantly lifted SBG’s asset value, but they do not mean immediate liquidity equivalent to listed shares. After completion of the 2026 additional investment, cumulative OpenAI investment amount is expected to reach approximately USD 64.6 billion, creating not only asset-value upside but also additional funding needs, downside valuation risk, and monetization uncertainty. The USD 40.0 billion bridge demonstrates the strength of bank access, but it is a large short-term obligation maturing in March 2027, and replacement with long-term funding during 2026 is central to the credit assessment. The April 2026 foreign-currency bond issuance and USD 2.5 billion repayment were progress on term-out, but not large enough to eliminate the USD 17.5 billion balance, and foreign-currency bond coupons are also high.

From a bondholder perspective, the focus should be not only the level of LTV, but also the means by which LTV is kept low. Asset sales are relatively clear positives for unsecured bonds, while collateralization of Arm or SoftBank Corp. shares strengthens liquidity but reduces free assets. Even if the cash position and LTV are sound, an increase in secured borrowings, the proportion of unlisted assets, and the repayment priority of the bridge could weaken the effective protection for unsecured bonds.

The condition for an improved credit view is for SBG to demonstrate funding arrangements for the remaining OpenAI tranches without excessive reliance on short-term borrowing or secured financing. In addition, SBG needs to gradually term out the USD 40.0 billion bridge through foreign-currency bonds, yen bonds, asset sales, co-investment, or other sources, while maintaining LTV below 25% and avoiding excessive erosion of free assets supporting unsecured bonds. If Arm’s share price and OpenAI valuation support NAV, downgrade pressure from JCR’s Negative outlook eases, and funding costs in domestic and overseas markets stabilize, the credit view could improve. The full-year materials satisfy one of these improvement conditions—headroom in asset value and LTV—but “funding arrangements and bridge term-out” remain in progress.

Conversely, the credit view would deteriorate if a decline in AI-related asset values and deterioration in capital-market conditions occur simultaneously. If Arm’s share price or OpenAI valuation falls, NAV decline, LTV increase, reduced collateral capacity, additional collateral or repayment pressure, and higher external funding costs could occur in sequence. If bridge term-out is delayed, secured borrowings increase further, and funding conditions in foreign-currency and yen bond markets deteriorate, spread widening and rating pressure would likely intensify even without an immediate short-term liquidity crisis. For SBG, the credit inflection point is not the size of asset value itself, but at what price, at what timing, and ahead of which creditors that asset can be used.

Monitoring items should be prioritized. The highest priority is the funding method for the remaining USD 10.0 billion OpenAI tranches scheduled for July and October 2026, including whether co-investors are involved, asset sales are used, or bridge drawdowns occur. Next are repayment and term-out plans for the USD 17.5 billion bridge balance as of May 13, 2026, issuance conditions for yen and foreign-currency bonds, and progress on asset sales. It is also necessary to monitor the balance, collateral scope, and additional collateral capacity of Arm and SoftBank Corp. share-backed loans; the potential for post-listing sale of PayPay shares; rating actions on JCR A/Negative and S&P BB+; and updates to OpenAI valuation and liquidity paths.

The final credit view is that SBG senior bonds are holding-company bonds supported by substantial asset value and strong capital-market access, but requiring adequate spread compensation for AI investment centered on OpenAI, bridge term-out, and expansion of secured financing. The FY2025 full-year materials show some improvement in asset value and LTV headroom compared with the previous assessment. However, bridge term-out and funding for additional OpenAI investment remain incomplete, and the credit view should be characterized not as stabilized but as event-dependent with some improvement bias. Hybrids offer equity credit and high coupons, but are more event-sensitive than seniors because of LTV increase, rating pressure, and call uncertainty. This report does not make an investment recommendation because live spreads have not been verified, but SBG sits between “domestic A-rated stable credit” and a “simple international BB+ high-yield bond.” It should be evaluated as a credit that combines the asset-value creation option of the AI era with the associated funding and structural subordination risks.

12. Short Summary & Conclusion

SoftBank Group Corp. is not a domestic telecom company, but an AI, semiconductor, and investment holding company spanning Arm, OpenAI, SoftBank Corp., PayPay, and SVF. The FY2025 full-year materials confirmed NAV of JPY 40.1 trillion, LTV of 17.0%, and a cash position of JPY 3.5 trillion as of end-March 2026, supporting near-term credit. At the same time, additional OpenAI investment, the USD 17.5 billion bridge balance remaining as of May 13, 2026, secured loans, and high-coupon foreign-currency bond issuance have shifted the focus for unsecured bond investors from the depth of asset value to asset flexibility and term-out execution capacity.

Senior-bond credit remains maintainable, but SBG should not be assessed as a telecom-bond-type stable credit; it should be viewed as an asset-value-supported BB+ holding company with event risk. The next points to confirm are funding for the remaining OpenAI investment, repayment and term-out of the bridge, the method of maintaining LTV below 25%, and whether secured borrowings expand further.

13. Sources

Primary company sources

• SoftBank Group Corp., Earnings Results for the Fiscal Year ended March 31, 2026, May 13, 2026. https://group.softbank/media/Project/sbg/sbg/pdf/ir/presentations/2025/earnings-presentation_q4fy2025_01_en.pdf
• SoftBank Group Corp., Earnings Results for the Fiscal Year Ended March 31, 2026, Investor Briefing, May 13, 2026. https://group.softbank/media/Project/sbg/sbg/pdf/ir/presentations/2025/investor-presentation_q4fy2025_01_en.pdf
• SoftBank Group Corp., Consolidated Financial Report for the Fiscal Year Ended March 31, 2026, May 13, 2026. https://group.softbank/media/Project/sbg/sbg/pdf/ir/financials/financial_reports/financial-report_q4fy2025_01_en.pdf
• SoftBank Group Corp., FY2025 Data Sheet, May 13, 2026. https://group.softbank/media/Project/sbg/sbg/pdf/ir/presentations/2025/earnings-datasheet_q4fy2025_02.pdf
• SoftBank Group Corp., Consolidated Financial Report for the Nine-Month Period Ended December 31, 2025, February 12, 2026. https://group.softbank/media/Project/sbg/sbg/pdf/ir/financials/financial_reports/financial-report_q3fy2025_01_en.pdf
• SoftBank Group Corp., Earnings Results for the 9-month Period Ended December 31, 2025, February 12, 2026. https://group.softbank/media/Project/sbg/sbg/pdf/ir/presentations/2025/earnings-presentation_q3fy2025_01_en.pdf
• SoftBank Group Corp., Follow-on Investments in OpenAI, February 27, 2026. https://group.softbank/en/news/press/20260227
• SoftBank Group Corp., Execution of Bridge Facility Agreement Primarily for the Follow-on Investments in OpenAI, March 27, 2026. https://group.softbank/en/news/press/20260327
• SoftBank Group Corp., Execution of Follow-on Investment (First Tranche) in OpenAI, April 1, 2026. https://group.softbank/en/news/press/20260401_0
• SoftBank Group Corp., Issuance of Foreign Currency-Denominated Senior Notes, April 16, 2026. https://group.softbank/en/news/press/20260416
• SoftBank Group Corp., Determination of Terms and Conditions for the Issuance in Japan of Hybrid Notes, April 10, 2026. https://group.softbank/en/news/press/20260410
• SoftBank Group Corp., PayPay Announces Closing of Initial Public Offering and Full Exercise of Underwriters' Option to Purchase Additional American Depositary Shares, March 30, 2026. https://group.softbank/en/news/press/20260330
• SoftBank Group Corp., Details of the Term of Disposal Following the Listing of PayPay on the Nasdaq Global Select Market, March 12, 2026. https://group.softbank/en/news/press/20260312
• SoftBank Group Corp., Completion of Additional $22.5 Billion Investment in OpenAI, December 31, 2025. https://group.softbank/en/news/press/20251231
• SoftBank Group Corp., Completion of Acquisition of Ampere Computing Holdings LLC, November 26, 2025. https://group.softbank/en/news/press/20251126
• SoftBank Group Corp., SoftBank Group to Acquire DigitalBridge for $4 Billion to Scale Next-Gen AI Infrastructure, December 29, 2025. https://group.softbank/en/news/press/20251229
• SoftBank Group Corp., Acquisition of ABB Ltd's Robotics Business, October 8, 2025. https://group.softbank/en/news/press/20251008

Rating agency and issuer-rating sources

• SoftBank Group Corp., Ratings page, as of February 12, 2026. https://group.softbank/en/ir/stock/rating
• Japan Credit Rating Agency, JCR Affirmed A/Negative and J-1 on SoftBank Group, April 30, 2026. https://www.jcr.co.jp/en/ratinglist/corp/9984
• SoftBank Group Corp., Comment on Moody's Release Related to Unsolicited Ratings, September 17, 2025. https://group.softbank/en/news/press/20250917

Related operating-company sources

• SoftBank Corp., Financial Reports page, FY2025 earnings briefing schedule. https://www.softbank.jp/en/corp/ir/documents/financial_reports/
• SoftBank Corp., Earnings Results for Q3 FY2025, February 9, 2026. https://www.softbank.jp/en/corp/news/press/sbkk/2026/20260209_01/

Unverified / Pending items

• Live secondary-market spreads, OAS, yields and bond prices as of May 13, 2026 were not verified. This report therefore does not provide a buy/sell recommendation.
• The FY2025 data sheet confirms the 2026 bridge facility balance of USD 17.5 billion as of May 13, 2026. Subsequent repayments, additional draws, or refinancing after that date were not verified.
• Funding mix for the planned July 2026 and October 2026 OpenAI tranches was not confirmed beyond company disclosure that each tranche is planned at USD 10.0 billion.
• A post-FY2025-results rating action by JCR or S&P after the May 13, 2026 earnings release was not confirmed. The rating discussion relies on SBG's ratings page as of February 12, 2026 and JCR's April 30, 2026 release.
• Post-listing trading performance and current market capitalization of PayPay were not used as a live valuation input.
• Current Arm share price and SBG's post-results NAV sensitivity were not recalculated from live market data in this report.
• Detailed covenant terms, margin-call levels, cross-default clauses and other individual bond or financing-document provisions were not reviewed in this issuer-level summary.