A historic breakthrough! The scale of issuance of Japanese dollar and Eurobonds sprinted to the 100 billion US dollar mark

The Zhitong Finance App learned that the scale of bonds issued by Japanese issuers in dollars and euros is expected to exceed 100 billion US dollars for the first time in the year. On Tuesday, a number of Japanese companies concentrated their entry into the Tier-1 bond market, pushing the total issuance volume closer to this historic figure.

This week's bond issuance wave, led by at least seven financial institutions, including Nomura Holdings (NMR.US) and Mitsubishi UFG.US (MUFG.US), is expected to be one of the busiest trading weeks for the global bond market this year.

Daniel Kim, co-head of Asia Pacific debt capital markets at HSBC Holdings, said, “Driven by increased mergers and acquisitions, large foreign currency capital expenditure requirements, and investment in new technologies such as artificial intelligence (AI) and data centers, we are seeing a significant increase in offshore bond issuance by Japanese companies.” At the same time, he pointed out that issuers' refinancing needs are also an important driving factor.

Currently, strong corporate fundamentals and renewed optimism about the economic outlook have boosted market risk appetite. Since the US dollar bond market is in one of the lowest yield premiums in decades, global companies are rushing to issue bonds to lock in this favorable financing cost. In this context, Japanese companies are also using balance sheets more frequently to carry out domestic and international mergers and acquisitions. In July of this year, Nippon Telecom giant Nippon Telegraph & Telephone (NTTTYY.US) issued US dollar and euro bonds with a scale of 17.7 billion US dollars, setting a record for the highest issuance of such bonds in the Asia-Pacific region. The proceeds were used to refinance a bridge loan for a merger and acquisition transaction.

Compiled data shows that since this year, Japanese issuers have issued a total of 93 billion US dollars and euro bonds, an increase of 67% over the same period last year. The data also shows that the previous record for the highest annual bond issuance by a Japanese issuer was about 98 billion US dollars.

It is worth noting that not only Japanese companies are planning to issue US dollar bonds on Tuesday; State Bank of India (State Bank of India) and HSBC Bank (HSBC.US) are also promoting bond sales.