COUNTRY REPORT JAPANJAPAN
DEBT CAPITAL MARKETS
› MUFG SELLS DOMESTIC DOLLAR BONDS
MITSUBISHI UFJ FINANCIAL GROUP sold US dollar
bonds in the domestic market for the
first time, with a Green bond issued by its
holding company that is eligible for total
loss-absorbing capacity requirements.
The US$120m 4.127% December 2028
bond priced at par to yield 123bp over US
Treasuries. According to a market source,
the spread is about 10bp wider than its
secondary curve.
The deal was done much quicker than
other domestic bond trades. After filing an
amended shelf registration statement to the
Kanto Local Finance Bureau on November
27, the company began sounding out
investors on Thursday and marketed the
deal on the same day before pricing Friday.
Usually in domestic deals, issuers spend
three days on marketing.
Since September 2016, the Japanese
banking group has been issuing Green
bonds in foreign markets that comply with
TLAC, but it decided to issue the bonds
in the domestic market this time given
growing demand.
The bonds attracted both central investors
such as life insurers, as well as regional
investors. The number of participants was
not disclosed, but given the denominations of
US$10m the number is 12 or less.
The proceeds will be used to fund eligible
green real-estate properties and renewable
energy projects.
Mitsubishi UFJ Morgan Stanley is the sole
lead on the deal that has expected ratings
of A+/AA– (R&I/JCR).
› TAIYO NIPPON SANSO TO SELL HYBRIDS
TAIYO NIPPON SANSO is planning to sell yen-
denominated dual-tranche hybrid bonds in
January to finance the acquisition of part of
Praxair’s businesses.
Mizuho, Mitsubishi UFJ Morgan Stanley and
Nomura were mandated for a 35 non-call
five tranche, with Mizuho and MUMSS also
mandated for a 40 non-call 10 tranche.
According to an amended shelf
registration statement filed on December
4, the company can issue up to ¥150bn
(US$1.3bn).
The Japanese industrial gas manufacturer
announced the acquisition of Praxair’s
European businesses in July and completed
it on December 3. It signed a €5bn one-year
bridge loan in November.
Taiyo Nippon Sanso plans to refinance
the bridge with loans, bonds and hybrid
financing.
Aiming to raise about ¥250bn in total
through hybrid financing in order to keep
sound finances and avoid stock dilution, it
is also planning to raise hybrid loans.
In addition to hybrid bonds, regular
corporate bonds are also being considered
as a funding tool, but Taiyo Nippon Sanso
has not announced in which currency of
denomination of those.
The hybrid bonds have expected ratings
of BBB/A– (R&I/JCR).SYNDICATED LOANS
› TAKEDA COMPLETES BRIDGE REFINANCINGTAKEDA PHARMACEUTICAL has agreed a US$3.7bn
loan from Japan Bank for International
Cooperation to complete the refinancing
of the US$30.85bn bridge loan backing its
proposed $46bn acquisition of London-
listed rare-disease specialist Shire.
“This marks the completion of the
intended refinancing program for our
bridge facility at an overall blended interest
rate across the various components of the
refinancing that is highly satisfactory,
which we believe supports our intention
to maintain our well-established dividend
policy and investment grade credit rating,”
Costa Saroukos, chief financial officer of
Takeda said.
The bridge loan, which was originally put
in place in May by JP Morgan, MUFG and
Sumitomo Mitsui Banking Corp, included
a US$15.35bn 364-day tranche, which was
subsequently syndicated in June.
There was also a US$4.5bn 364-day
tranche; a US$7.5bn 364-day tranche, which
was replaced in June through a US$7.5bn
five-year syndicated term loan; and a
US$3.5bn 90-day facility.
In October Takeda signed a ¥500bn
(US$4.46bn) 60-year subordinated loan to
partially refinance the bridge loan.
In November, Takeda tapped the bond
markets for €7.5bn and US$5.5bn to fund
the acquisition and reduce the bridge loan.
On November 20, Takeda received
clearance from the European Commission
for the acquisition.EQUITY CAPITAL MARKETS
› SOFTBANK’S IPO BOOKS WELL COVEREDThe institutional books of SOFTBANK CORP’S
¥2.41trn (US$21.1bn) IPO were well covered
on the last day of bookbuilding on Friday,
according to people close to the deal.Demand came from a mix of long-only
and hedge funds, the people said.
The Japanese mobile phone unit of
SoftBank Group is offering shares in its
jumbo listing at ¥1,500 each, equivalent
to a 5% dividend yield. The base deal
comprises 1.6bn secondary shares and there
is an overallotment of 160m shares.
Bookbuilding was troubled by an
hourslong nationwide breakdown of
SoftBank Corp’s network on Thursday
due to the failure of some Ericsson
network equipment, which also affected
carriers in other countries. The company’s
management responded on a telephone
conference call with insitutional investors
on Friday with a promise to invest more
in infrastructure, according to DealWatch,
IFR’s Japanese sister publication.
Insitutional books closed at 5pm Friday
London time. The retail subscription
deadline was prolonged from 11am to 5pm
Tokyo time on Friday.
Of the offering, 90% has been earmarked
for domestic investors. With about 97% of
this portion allocated to retail buyers and
the rest to domestic institutions, that puts
about 87.5% or ¥2.1trn of the entire deal in
the hands of retail investors.
International institutions will get 10% of
the overall offering.
SoftBank’s brand recognition is one
reason for the strong retail interest, several
people working on the deal have said.
The high dividend yield is also a big draw
for investors accustomed to investing
their savings in a very low interest rate
environment.
The deal will price on December 10 and
the shares are due to be listed on December
19.
Deutsche Bank, Goldman Sachs, JP Morgan,
Mizuho, Nomura and SMBC Nikko are the joint
global coordinators.
Deutsche Bank, Goldman Sachs, JP Morgan,
Mizuho, Nomura, Morgan Stanley, SMBC Nikko
and Bank of America Merrill Lynch are leading
the international offering.
Daiwa, Mitsubishi UFJ Morgan Stanley,
Mizuho, Nomura, SBI and SMBC Nikko are the
domestic lead managers.› MONEY FORWARD PLANS FOLLOW-ONMONEY FORWARD plans to raise up to ¥8.13bn
through an international follow-on offering,
based on a minimum 3% discount to the
closing price of December 5 at ¥4,190.
The Japanese personal financial
management company is offering 2m
shares in a discount range of 3%–5% to the
market price.
There is an overallotment option of
500,000 new shares. The offering represents
12.9% of total outstanding shares.