SoftBank expands Arm-backed margin loan to $25 billion

SoftBank Group Corp. has increased its margin loan backed by shares of chip designer Arm Holdings plc by $5 billion, taking the total facility to $25 billion. The Japanese conglomerate signed the renegotiated terms with creditors in September to help fund its expanding investments in artificial intelligence, according to people familiar with the transaction.

This marks the third upsize for the facility, which began at $8.5 billion in 2023, rose to $13.5 billion in 2024, and reached $20 billion last year. As of May, the credit line was secured by 769 million Arm shares, representing a 72% stake in the chipmaker. SoftBank owns nearly 90% of Arm in total.

Strong lender interest was driven by a 142% rise in Arm's share price this year. SoftBank initially sought an increase between $3 billion and $5 billion, but received roughly $7 billion in demand. People familiar with the matter noted that SoftBank could raise the facility further if Arm shares continue to climb.

The loan matures in September 2027 and keeps an interest margin of roughly 225 basis points over the benchmark Secured Overnight Financing Rate, along with a credit adjustment spread of 25 basis points. SoftBank had drawn $20 billion under the facility as of December as founder Masayoshi Son finances commitments that include nearly $65 billion pledged to OpenAI.