Investment company led by famous American investor Warren Buffett On the 17th, Berkshire Hathaway decided on the terms of issuance of yen-denominated bonds. Amid expectations for continued investment in Japanese stocks, the company raised funds in the yen bond market for the second time in April.
According to the lead manager, Berkshire issued five bonds, mainly three-year bonds, totaling 122 billion yen. The company also issued a 35-year bond, the second-longest yen bond in history, suggesting strong demand for the company’s bonds despite deep-rooted uncertainty about the future of ultra-long-term interest rates due to expectations that the Bank of Japan will move toward normalizing monetary policy. .
Haruyasu Kato, fund manager at Asset Management One, said, “It’s amazing that we were able to successfully complete a deal with a total value of over 120 billion yen in a difficult environment where many deals were canceled or postponed domestically.” Regarding the interest rate of the three-year bond, which has the shortest maturity among the five bonds, set at 0.955%, he expressed the view that it was cheap for Berkshire’s three-year bond, which has solid creditworthiness, even though the outlook for interest rates is smoldering. Ta.
This is Berkshire’s second yen-denominated bond this year. According to data compiled by Bloomberg, Berkshire has issued most of its corporate bonds in yen since September 2019, when it first entered the yen bond market. Mitsubishi Corporation and They have a growing presence in the Japanese stock market, with each holding around 8% of the stock in Japan’s five major trading companies, including Mitsui & Co., worth a total of about 3 trillion yen.
Eiji Kinouchi, chief technical analyst at Daiwa Securities, analyzed in a report on the 9th of this month that Berkshire is likely to buy stocks in advance and then buy yen from corporate bonds later. Furthermore, given that insurance, banking, automobiles, semiconductors, mining, etc. have outperformed over the past 1-2 months, there is a possibility that investments in stocks in these sectors may be announced in the future. Indicated.
According to Bloomberg data, as of the 17th, the total amount of yen-denominated bonds issued by foreign issuers such as Berkshire in fiscal 2023 was 2.5 trillion yen, the largest amount for the same period since fiscal 2018. Japan’s relatively low interest rates tend to be attractive not only to companies investing in yen assets but also to foreign governments that hold the yen they procure as foreign exchange reserves. On the 16th, the Republic of Poland issued Samurai bonds for the first time in 10 years.
“This is the first time I’ve had a week like this.” Shunsuke Oshida, head of credit research at Manulife Investment Management, said he held 7-8 meetings with overseas issuers this week alone. He said that with yen, interest rates are relatively stable and it is possible to raise money cheaply, so he probably wants to come to Japan and have a conversation now.
(The article has been updated with comments from market participants added to the third paragraph.)