Utilities Seek Record Loans as Fuel Costs Spike: Japan Credit
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Japan’s top five electric utilities, shut out of the bond market following the Fukushima nuclear disaster, are borrowing a record 4 trillion yen ($52 billion) in loans at a premium to pay for the surging cost of fuel.
Tohoku Electric Power Co., based in the tsunami-damaged northeast, will pay 1.4 percent interest on the 50 billion yen, 15-year loan it clinched on Sept. 30, or a 45.5 basis points spread over the similar-maturity government notes, according to Bloomberg calculations based on company data. Borrowing at that rate, the Japanese utilities would pay an extra 2.6 billion yen in loan interest this fiscal year than they would selling bonds, the calculations show.