Symbiosis in Samurais

Transcription

1 Symbiosis in Samurais - WSJ.com 第 1 頁, 共 3 頁 June 5, 2008 HEARD IN ASIA Symbiosis in Samurais Japanese Investors, Corporate Issuers See Bonds' Benefits By ANDREW MORSE and LAURA SANTINI June 5, 2008; Page C2 TOKYO -- As the continuing credit crunch caps bond issuance world-wide, an unlikely oasis of normalcy has begun to attract global financial institutions looking to raise funds: Japan. DOW JONES REPRINTS This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit: See a sample reprint in PDF format. Order a reprint of this article now. Issuance of Samurai bonds, or yen-denominated bonds sold by non-japanese issuers to Japanese investors, is hitting record levels -- with companies as diverse as Goldman Sachs Group, Deutsche Telekom of Germany and France's Renault seeking to tap capital from Japanese investors. Australian banks have been particularly active issuers. Samurai bonds' appeal slices two ways. Foreign corporations, many in financial services, are able to raise sorely needed funds. Meanwhile, yield-starved Japanese investors are getting better returns than they can in more traditional investment vehicles. Samurai bonds are often bought by institutions, then packaged for sale to individuals in bond funds. Nearly $5 Billion in Quarter For the first quarter of the year, 19 foreign companies -- many in financial services -- raised just shy of $5 billion. That was about 4.5 times the figure for the year-earlier period, and a record for any first quarter, according to data tracker Thomson Financial. Since March, Samurais continued to flow into Japan's bond market, and the total for the first half of 2008 may set a record for any half-year. Though it is unlikely Japan will fill the shoes of other big bond markets in the world -- most notably the U.S. market -- during the continuing credit crunch, use of Samurai bonds is making life easier for many high-rated companies looking for affordable financing during tough times. "We've seen continued strength in new credits coming to the market," says Brian Mccappin, head of fixed-income products at Nikko Citigroup, one of the most active underwriters of

2 Symbiosis in Samurais - WSJ.com 第 2 頁, 共 3 頁 Samurai bonds. "Japan is a relatively safe haven of liquidity." While the Samurai market has attracted issuers from around the world, a group of first-time borrowers has emerged: Australian banks. Australia & New Zealand Banking Group, Westpac Banking, Commonwealth Bank of Australia and National Australia Bank have turned to the Samurai market this year. While Australian lenders largely avoided problem loans in the U.S. subprime-mortgage sector, the banks have struggled to raise funds from global bond investors -- except buyers of Samurais. As stock markets tumbled in January, Westpac launched a Samurai-bond offering. The bank easily raised 50 billion yen, equivalent then to roughly $470 million, opening floodgates to subsequent deals of equal value or bigger by Australian lenders. The Samurai process was "extremely smooth," says Fergus Blackstock, head of debt capital markets in Australia for UBS, one of Westpac's investment banks for the transaction. "Since then, deal sizes have increased, and the market remains open for new and existing issuers," he says. The emergence of Japan as a source of corporate funding comes as other bond markets have withered in the credit drought. Investors became jittery about buying bonds amid fears that financial institutions in the U.S. and Europe might be sitting on piles of mortgages that go bad. Global bond issuance fell 47% to $1.1 trillion in the first quarter. U.S. corporate-bond issuance also dropped 47%, to $547 billion, according to Thomson. In Japan, low interest rates at home have forced investors to scout out ways to improve their return on savings. The yield on a five-year Japan-government bond is 1.32%, about two percentage points lower than that on a comparable U.S. Treasury note. Skittish about debt denominated in foreign currencies, Japanese investors have shown preference for Samurais, which offer higher yield without piling on much more risk. Investment-grade companies from overseas do have to pay investors more than the Japanese government does to borrow money. But for most of these companies, borrowing in Japan through Samurai issuance is still cheaper than in their home markets. Luke Davidson, who heads funding activities at ANZ, says he saw a Samurai issue as a way broaden his bank's investor base to what he deems buy-and-hold investors in Japan. In March, ANZ raised $1.3 billion in its inaugural Samurai issuance. From Renault to Goldman Meanwhile, Australian companies are far from the only ones to tap the Japanese market. Earlier this year, Deutsche Telekom and Renault each raised about $300 million in Samuraibond offerings. Goldman Sachs, a longtime Samurai issuer, raised $1.2 billion as part of an overall strategy to diversify its investor base globally. And Hyundai Motor unit Hyundai Capital Services of South Korea has sold about $393 million in yen-denominated debt this year. In November, General Electric Capital Corp., a unit of U.S.-based General Electric Co., received about $500 million in a Samurai sale.

3 Symbiosis in Samurais - WSJ.com 第 3 頁, 共 3 頁 Write to Andrew Morse at andrew.morse@wsj.com 1 and Laura Santini at laura.santini@wsj.com 2 URL for this article: Hyperlinks in this Article: (1) mailto:andrew.morse@wsj.com (2) mailto:laura.santini@wsj.com Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at or visit /** **/ /** **/

4 RBS to issue yen-denominated samurai bonds - WSJ.com 第 1 頁, 共 1 頁 June 18, 2008 RBS to issue yen-denominated samurai bonds By MEGUMI FUJIKAWA THE WALL STREET JOURNAL EUROPE June 18, 2008 TOKYO -- Royal Bank of Scotland Group PLC said it plans to issue its first yen-denominated bonds in Japan, underlining foreign borrowers' recent increased interest in the samurai market. DOW JONES REPRINTS This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit: See a sample reprint in PDF format. Order a reprint of this article now. Royal Bank of Scotland named RBS Securities and Daiwa Securities SMBC as joint-lead managers for its first such issue. Details such as the timing and issuance amount haven't been announced. RBS's decision to tap the samurai market comes as foreign borrowers increasingly seek inexpensive funding in Japan. Recently, UBS AG announced plans to sell its inaugural samurai in five-year fixed- and floating-rate tranches, aiming to diversify its debt into additional currencies. So far this year, there has been a total of trillion yen ($11.6 billion) in samurai issuance, already exceeding the trillion yen in the first half of 2007, according to Thomson Reuters. At the same time, some foreign issuers have decided to refrain from raising funds in the samurai market, given the recent heightened volatility in the Japanese market and domestic concerns about the creditworthiness of foreign financial institutions. Prudential Financial Inc. and Suncorp-Metway Ltd. ABN both decided on Tuesday to postpone pricing their planned samurais. Write to Megumi Fujikawa at megumi.fujikawa@dowjones.net 1 URL for this article: Hyperlinks in this Article: (1) mailto:megumi.fujikawa@dowjones.net Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at or visit /** **/ /** **/

5 Barclays in talks with Japanese lender to replenish capital - Print Version - Inter... 第 1 頁, 共 2 頁 2008/6/21 Barclays in talks with Japanese lender to replenish capital By Julia Werdigier Friday, June 20, 2008 LONDON: Barclays, the British bank that is seeking funds to replenish its capital, is in discussions with Sumitomo Mitsui Financial Group about a 100 billion cash injection, a person with knowledge of the talks said Friday. Barclays had said Monday that it was "actively considering" the sale of new shares to raise $927 million worth of capital to better cope with first-quarter write-downs of 1.7 billion, or $3.35 billion, as a result of the credit crunch. An investment by Sumitomo would also allow the two banks to cooperate more closely in Asia, said the person, who declined to be identified because the talks were not public. But some analysts said the British bank would need at least 4 billion to weather the difficult credit markets. "The Sumitomo investment would not be enough," said Arturo de Frias, an analyst at Dresdner Kleinwort in London. "I'm a bit surprised that they haven't made a rights issue yet because the longer they wait the lower the rights issue will be." Barclays has so far refrained from following some of its British rivals in tapping existing shareholders for capital. But rights issues announced recently by HBOS, Royal Bank of Scotland and Bradford & Bingley all faced challenges when the banks' share prices dropped sharply ahead of the planned sales. Bradford & Bingley even had to cut the price of the new shares that it offered and the volatile share prices prompted Britain's financial regulator to announce new rules for short-selling stocks. European banks have raised about $125 billion of capital since the beginning of 2007 to compensate for losses stemming from the turmoil in the subprime mortgage market in the United States. British banks offering mortgages are also suffering as the housing market declines and more customers default on their loans. HBOS, the biggest mortgage lender in Britain, said Thursday that house prices in Britain would fall as much as 9 percent this year and that charges for bad mortgages would rise. Barclays said this week that pretax profit in May was "well ahead" of the figure a year earlier as its consumer and commercial banking units expanded. Write-downs at the bank, which is set to announce figures on Aug. 7, have been smaller so far than at other British lenders but some analysts expect further mark-downs of about 3 billion. Barclays previously declined to say whether it would ask its existing investors China Development Bank, which owns a 3 percent stake, or Temasek Holdings of Singapore, which owns a 2.1 percent stake, to increase their holdings. The bank's shares fell 3.7 percent to 3.04 in London on Friday. Japanese banks have not been immune to the subprime market turmoil. Mitsubishi UFJ, the biggest bank in Japan, had 51 billion in subprime-related losses and reported a 68 percent decline for its third-quarter profit. Subprime-related losses at Sumitomo, whose discussions with Barclays were reported earlier in the Japanese business newspaper Nikkei, reached 99 billion in the nine months through the end of December. Credit Suisse to cut more jobs Credit Suisse will cut about 75 jobs across its investment banking division in Britain, the bank said Friday. "Due to market conditions and projected staffing levels required to meet client needs, we are reducing head count by approximately 75 in the United Kingdom within the investment bank and certain support functions," the bank said.

6 Barclays in talks with Japanese lender to replenish capital - Print Version - Inter... 第 2 頁, 共 2 頁 2008/6/21 Prior to the latest layoffs, Credit Suisse had cut about 1,000 investment banking jobs this year, after shedding 170 jobs in the same division last year and 150 jobs in its residential mortgage-backed securities business. Many other financial companies have scaled back their work forces since the U.S. housing crisis escalated in August. Notes: Copyright 2008 The International Herald Tribune