Nippon Steel＊s record-breaking convertible bond offering is highlighting the quest of Japanese companies for cheaper funding than increasingly expensive traditional debt, which sets the stage for more such deals.
Japan＊s largest steelmaker on Tuesday raised ?600 billion ($3.9 billion) from an offering of bonds that can be converted into stock, more than it initially planned on the back of strong demand. The proceeds will help repay loans taken out for its acquisition of United States Steel.
The prospects of a surge in fiscal spending and central bank rate hikes have raised the cost of traditional debt instruments in Japan. The yield on the 10-year government bond hit its highest in almost 30 years in January, and shares have rallied after Prime Minister Sanae Takaichi＊s historic election victory following a campaign in which she promised budget expansion.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.