(Bloomberg) -- SoftBank Group Corp. will raise about ¥500 billion ($3.2 billion) from retail investors at a coupon of 3.98% — the highest on a yen-denominated senior bond from the company in more than 15 years.

The rate on the unsecured seven-year note was set near the upper end of the previously announced range of 3.5%–4.1%, according to a term sheet from the company Wednesday. The last time it sold a like bond with a coupon that high was in 2009 at 4.52%.

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Mom-and-pop investors have been increasingly drawn to the corporate bond market in search of higher returns, after the Bank of Japan ended its negative interest policy in March 2024. Yields on Japanese government bonds, which serve as a benchmark for corporate issues, have climbed amid rising inflation and market caution over Prime Minister Sanae Takaichi’s fiscal spending package.

“With interest rates rising, individual investors are also finding corporate bonds more attractive,” said Kazuma Ogino, senior credit analyst at Nomura Securities Co. Corporate bond issuance has reached record levels, making it harder for companies to sell bonds to institutional investors, he said, pointing out that SoftBank is one of Japan’s largest bond issuers.

While higher yields have raised companies’ borrowing costs, their appetite for funding remains strong. Japanese firms have raised a record ¥2.79 trillion through yen-denominated retail bonds so far in 2025, surpassing the previous high last year, according to data compiled by Bloomberg.

The proceeds from the bond sale will partly be used to repay a bridge loan in connection with an additional investment in US-based OpenAI.

Earlier this month, SoftBank Group announced second quarter net income that beat analyst expectations on gains from its investments in artificial intelligence, according to its financial disclosure statements. One of the biggest contributors to this growth was its Vision Fund, which benefited from rising valuations of unlisted AI-related holdings such as OpenAI.

On the same day, the company disclosed that it had offloaded its entire stake in Nvidia Corp. for $5.8 billion.

SoftBank Group’s shares have fallen roughly 30% in the past month as global momentum in AI stocks began to cool. Its credit default swap spreads — a measure of credit risk — have widened to their highest level in about four months.

Ogino said that global views on “AI-related investments are mixed, with both bullish and cautious sentiment, and that this is affecting the secondary market.”

(Updates with analyst comment from fourth paragraph. A previous version of this story was corrected)

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