COUNTRY REPORT JAPANMarketing began last Thursday at
T+120bp area, and was tightened to
T+95bp-100bp before pricing at the tight
end of final guidance.
The Reg S notes have expected ratings of
A3/A+ (Moody’s/S&P).
Morgan Stanley (B&D), Nomura, JP Morgan
and Bank of America Merrill Lynch were
bookrunners.
› MIZUHO PRINTS IN NEW FORMAT
MIZUHO FINANCIAL GROUP last Wednesday priced
a three-part TLAC-eligible US$2.75bn deal,
comprised of a US$650m six-year non-
call five fixed-to-floating notes, a US$1bn
six non-call five floating-rate notes and a
US$1.1bn 11 non-call 10 fixed to FRN.
The 6NC5 fixed-rate tranche priced at
Treasuries plus 115bp and the 6NC5 floater
at three-month Libor plus 100bp, from initial
thoughts of Treasuries plus 130bp area.
THe 11NC10 priced at Treasuries plus
135bp, from initial thoughts of 150bp area.
The pricing was estimated at around
10bp over the issuer’s existing curve.
“Mizuho’s previous TLAC issues were not
issued in this format and we think they are
doing this now because of the advantage
to issuing banks of being able to call back
the bonds before they lose eligibility as
TLAC (once they have less than one year to
maturity),” wrote CreditSights.
The SEC-registered senior unsecured
notes are expected to be rated A1/A–
(Moody’s/S&P).
Proceeds will be used to extend a loan to
Mizuho Bank, which will use the funds for
general corporate purposes.
Mizuho and JP Morgan were joint lead
managers.
› MUFG TURNS ON TAPS
MITSUBISHI UFJ FINANCIAL GROUP, rated A1/A–/A,
last Tuesday priced US$3bn in new paper.
The offering comprised a US$1bn 10-year
new issue, priced at Treasuries plus 115bp,
inside initial price thoughts of plus 125bp-
130bp, and two taps: a US$1.15bn reopening
of a five-year fixed-rate tranche at Treasuries
plus 95bp, inside IPTs of 105bp-110bp, and
a US$850m increase of a five-year floater at
three-month Libor plus 81bp.
Morgan Stanley and MUFG were active
bookrunners for the SEC-registered
offering.
SYNDICATED LOANS
› KOBE STEEL RAISES ¥240BN PF
A project company wholly owned by Kobe
Steel, Japan’s third-biggest steelmaker,
has closed a loan of around ¥240bn
(US$2.153bn) to build two 650MW coal-
fired power plants in Kobe, according to a
statement from the parent company.
KOBELCO POWER KOBE NO.2 is the borrower.
Signing took place last Friday.
The plants are expected to commence
operations in the fiscal years ending
March 31 2022 and 2023. The electricity
produced will be sold to Kansai Electric
Power.
Japanese banks have become more
cautious towards coal-related projects out
of environmental concerns. However, most
of them are still keen to support so called
ultra-supercritical coal plant projects, such
as the two planned in Kobe, which produce
less carbon dioxide emissions than older
technologies.
In March 2016, Kobe Steel raised a
¥76.28bn 15-year loan for its Moka gas-fired
power plant in Tochigi prefecture, paying a
margin of around 50bp over Tibor.› GLP J-REIT OBTAINS ¥41BN IN LOANSGLP J-REIT signed three syndicated loans and
two bilateral loans totalling ¥41.32bn for
real estate acquisitions on August 30, the
Tokyo Stock Exchange-listed REIT said.
MUFG and Sumitomo Mitsui Banking Corparranged a ¥9.97bn four-year bullet term
loan, a ¥14.51bn six-year bullet term
loan and a ¥8.84bn nine-year bullet term
loan, which pay interest margins of 19bp,
20.5bp and 32.5bp over three-month Tibor,
respectively.
Citigroup, Development Bank of Japan, Mizuho
Bank, Norinchukin Bank, Resona Bank, Shinsei
Bank and Sumitomo Mitsui Trust Bank joined
those deals in syndication.
SMBC and MUFG are providing ¥4.8bn
and ¥3.2bn one-year bullet term loans,
respectively. Both loans pay a margin of
15bp over one-month Tibor.
Drawdown for all facilities is slated for
September 3.
The REIT invests in logistics facilities
mainly in Japan’s Kanto and Kansai
regions. It last tapped the syndicated loan
market when it raised two bullet term
loans totalling ¥32.27bn for real estate
acquisitions and refinancing. MUFG and
SMBC were the arrangers.EQUITY CAPITAL MARKETS
› ASAHI BLOCK PRICES AT BOTTOMAn undisclosed seller has raised ¥13bn
(US$119m) through the sale of 2.75m ASAHISMTB eyes Green euro issue
Bonds Bank to issue opco bonds, in break from peers’ holdco paperSUMITOMO MITSUI TRUST BANK will make a rare trip
to the euro market to sell its first Green bond,
which should carry a better rating than other
Japanese bank paper in this format.
SMTB, Japan’s fifth largest bank by total
assets, mandated BNP Paribas and Bank
of America Merrill Lynch as joint green
structuring agents on the short-dated senior
unsecured transaction. They are also lead
managers alongside Credit Agricole, Goldman
Sachs and Daiwa.
The issuer will meet investors from
September 10. The proceeds will fund existing
and new eligible green projects.
Japan’s three mega banking groups –
SMFG, MHFG and MUFG – have only sold
euro fixed-rate senior debt from their holding
companies in recent years, reflecting their
need to raise billions in loss-absorbing debt
to meet global TLAC standards.
That includes their green issuance,
which will also count towards that TLAC
target. MUFG, for example, sold a €500m
(US$580m) five-year at swaps plus 30bp in
January this year.
SMTB, however, a subsidiary of SumitomoMitsui Trust Holdings, does not need to
meet TLAC. The notes are being issued at
the opco level, which is likely to result in a
slightly better rating. Holdco senior debt is
structurally subordinated to opco senior.
The bonds are expected to be rated A1 by
Moody’s and A by S&P. Green TLAC-eligible
senior bonds sold by SMFG, MHFG and MUFG
have all been rated one notch lower at S&P,
at A1/A–.
The issuer picked euros to broaden its
funding mix, a lead said. All of its foreign
currency issuance has been limited to US
dollars in recent years, according to the
investor presentation. The Green bond market
is also more established in Europe than in
other regions.
While holdco debt has dominated recent
Japanese euro issuance, the country’s
other major lenders still have opco debt
outstanding that will provide an obvious
pricing comparison.
A Sumitomo Mitsui Banking Corporation
€750m 1% January 2022 (A1/A) was quoted
last Monday at 33bp over swaps, for example.
ALICE GLEDHILL