SoftBank Group seeks $7.5-billion loan secured by planned Arm sale

SoftBank Group is in talks with banks for a loan of about $7.5 billion tied to the Japanese conglomerate’s planned sale of Arm to Nvidia, according to people familiar with the matter.

Mizuho Bank is coordinating the deal, said the people. The proceeds would provide investment funds for SoftBank’s Vision Fund operation, and the collateral would be receivables from the cash portion of the proposed Arm sale, the people said.

A loan of that size would be among SoftBank’s biggest in dollars, following a record facility recently. 

The company increased a margin loan backed by shares in Alibaba Group Holding to $10 billion, people familiar said earlier this month. It also priced the biggest Japanese corporate bond deal of the year last week, when it sold 405 billion yen ($3.7 billion) of debt securities.

Nvidia agreed in September to buy SoftBank’s chip division Arm for $40 billion. The deal is awaiting regulatory approval. Last week, Nvidia’s CEO Jensen Huang said he is still confident that regulators will green-light the acquisition.

But the semiconductor industry’s biggest-ever acquisition faces headwinds: Chinese tech companies, including Huawei, are lobbying their government against the transaction. The UK, where Arm is based, said it plans to investigate the implications of the deal on national security grounds.