Credit Market Takes SoftBank’s 25% Arm Stake Purchase in Stride

The credit market appears to have shrugged off concerns that SoftBank Group Corp.’s $16.1 billion purchase of a stake in Arm Holdings Ltd. may weaken its debt repayment ability, at least for now.

The cost to insure SoftBank’s debt against default was indicated 5.5 basis points lower at 225 basis points, according to a trader Tuesday. If it holds, the move would mark the biggest decline in a week, according to CMA data. The Japanese tech conglomerate’s credit default swaps dropped to a two—year low of about 200 basis points on July 31.

The CDS move suggests investors are more ...