SoftBank Group priced a \u00a51 trillion ($6.3 billion) retail bond in an offering that expands Japan\u2019s retail corporate debt market and gives investors a viable alternative to bank deposits and stocks.<\/p>\n
The seven-year notes were priced on Friday at the higher end of the 4.3%-4.9% range announced by the company last month, according to a company filing. The average coupon on yen-denominated retail corporate bonds issued in Japan this year was 2.3%, data compiled by Bloomberg show.<\/p>\n
\u201cThe yield level and \u00a51 trillion size could draw new individual investors into the market,\u201d said Kazuma Ogino, senior credit analyst at Nomura Securities. Retail investors who hold bonds to maturity are less exposed to interim price swings and can benefit from higher yields, which he said is \u201ca tailwind for the retail bond market.\u201d<\/p>\n
The offering comes as Japan\u2019s benchmark 10-year government bond yield topped 3% for the first time in about 30 years, making bonds an attractive option for households that have traditionally kept much of their financial assets in bank deposits.<\/p>\n
\u201cI feel interest among individual investors in bonds is clearly increasing,\u201d said Takayuki Hiratsuka, head of SMBC Nikko Securities\u2019 Nihonbashi branch, with the 10-year JGB yield above 3% and inflation concerns growing. He said inquiries are increasing from clients seeking yields above bank deposits or alternatives to stocks, with interest also spreading to younger generations.<\/p>\n
Issuance of yen-denominated retail corporate bonds in Japan has reached \u00a52.88 trillion so far this year, including SoftBank Group\u2019s latest deal, already surpassing every previous full-year total as of Sept. 4, according to data compiled by Bloomberg.<\/p>\n
Japanese companies\u2019 funding needs have been propelled by the surge in mergers and acquisitions deals and capital expenditure spending. And individual investors are a suitable alternative given that large institutional bond sales can put pressure on spreads.<\/p>\n
\u201cTapping retail investors can diversify funding sources and ease that pressure,\u201d Ogino said. \u201cThat could be a win-win and help broaden the retail bond market.\u201d<\/p>\n
The higher-than-average coupon also reflects the higher compensation being paid for the greater credit risk that investors bear. SoftBank Group is rated investment grade by Japanese rating firms, while major global rating companies have assigned a speculative-grade rating.<\/p>\n","protected":false},"excerpt":{"rendered":"SoftBank Group priced a \u00a51 trillion ($6.3 billion) retail bond in an offering that expands Japan\u2019s retail corporate…\n","protected":false},"author":2,"featured_media":87182,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[2726,8,17,909],"class_list":["post-87181","post","type-post","status-publish","format-standard","has-post-thumbnail","category-japan","tag-bonds","tag-japan","tag-japanese","tag-softbank"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/87181","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=87181"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/87181\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/87182"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=87181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=87181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=87181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}