The SoftBank Group finds itself navigating a period of stark contrasts. As one of its key subsidiaries celebrates a triumphant market debut, the parent company faces mounting scrutiny over its aggressive financial strategy, creating a complex and risky dual narrative for investors.
A Credit Rating Under Pressure
Beyond the glow of recent successes, concerns are mounting over SoftBank’s balance sheet. The credit rating agency S&P Global Ratings has revised its outlook on the conglomerate to negative. This shift is a direct response to the group’s massive planned expansion in artificial intelligence. SoftBank intends to inject an additional $30 billion across three tranches this year into U.S. startup OpenAI, aiming to increase its stake to 13 percent.
To finance this substantial commitment, the company is pursuing a bridge loan of up to $40 billion. This would represent the largest dollar-denominated borrowing in SoftBank’s history. Consequently, the cost of the firm’s credit default swaps (CDS) has surged to an eleven-month high, currently marking the highest level among major Japanese corporations.
PayPay’s Wall Street Triumph
In a significant win for the group, Japanese payment service provider PayPay, which is majority-owned by SoftBank, enjoyed a powerful debut on the Nasdaq last week. Shares soared well above their $16 issue price, closing above $21 on Friday. This performance grants the subsidiary an initial valuation of approximately $12.7 billion.
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This listing stands as the largest U.S. IPO by a Japanese company in a decade. PayPay’s core business is expanding rapidly, with its annual transaction volume recently surpassing 15 trillion yen. CEO Ichiro Nakayama has also indicated the potential for a secondary listing in Tokyo, a move intended to enhance the stock’s liquidity and attract a broader base of investors.
The Path to Preserving Credit Quality
S&P has explicitly warned of the rising concentration risk within SoftBank’s portfolio. The proposed new financing would push the proportion of unlisted equity holdings above 50 percent. OpenAI alone would then account for roughly 30 percent of total investment assets—a level of exposure previously seen only with chip designer Arm Holdings.
To avoid an actual downgrade of its credit rating, management must now take corrective action. Analysts at Bloomberg Intelligence anticipate the group will divest assets to improve its crucial loan-to-value ratio. Founder Masayoshi Son has previously taken this route, selling stakes in T-Mobile US and Nvidia last year to fund his AI strategy.
The defense of its rating in 2026 hinges directly on this delicate balancing act. S&P suggested it could revise the outlook back to stable once portfolio liquidity improves through public listings and the debt ratio declines via targeted asset sales.
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