Nov. 10 (Bloomberg) -- Aeon Co., Japan’s largest supermarket retailer, plans to raise 100 billion yen ($1.1 billion) from what may be the country’s first public convertible bond sales this year.

The Chiba-based company will sell 50 billion yen of three- year, zero coupon bonds between Nov. 20 and Nov. 25 and the same amount of four-year, 0.3 percent notes, according to a filing with Japan’s Finance Ministry today. Money raised from the sales will be used to repay debt, it said.

“The downside risk is getting lower and this is a defensive sector,” Yasuhiro Matsumoto, an analyst at Shinsei Securities Co., said in a phone interview from Tokyo. “Also a 0.3 percent coupon is better than deposit interest rates” at banks, he said.

Orix Corp., the Tokyo-based financial company, sold 150 billion yen of 1 percent convertible notes to individual investors Dec. 17 in the last sale of the securities in Japan’s domestic debt market, according to data compiled by Bloomberg. Takashimaya Co., Kenedix Inc. and Kintetsu Corp. sold convertible notes overseas this year while Taisei Corp. sold 4.517 percent notes in a private placement, the data show.

The Nikkei 225 Stock Average rose 0.6 percent to 9,870.73 at the close of trading in Tokyo, taking its gain this year to 11 percent as Japan emerges from the worst recession since World War II. Reports today painted a mixed view of the world’s second-largest economy, with the current-account surplus unexpectedly widening in September while merchant sentiment tumbled to a five-month low.

Seven months of gains in industrial production have yet to spread to consumers, whose spending accounts for more than half the economy. Wages have slid for 16 months, exacerbating declines in consumer prices. The Bank of Japan last month forecast deflation will extend into fiscal 2011 even as economic growth picks up.

To contact the reporters on this story: Yusuke Miyazawa in Tokyo at ymiyazawa3@bloomberg.netTaku Kato in Tokyo at tkato6@bloomberg.net

Last Updated: November 10, 2009 03:45 EST