Goldman Sachs Said to Boost Samurai Bond Offer After Delay

Goldman Sachs Group Inc. (GS) plans to increase its first sale of Samurai bonds in more than four years to at least 75 billion yen ($943 million) from an original target of 50 billion yen, according to a person with direct knowledge of the matter.

The brokerage will offer at least 70 billion yen of five- year notes priced to yield 205 basis points more than the yen swap rate, the person said, asking not to be identified because the details are private. Goldman also intends to sell at least 5 billion yen of five-year, floating-rate notes at 220 basis points more than the three-month London interbank offered rate for yen, said the person. The bonds could price as soon as tomorrow, the person said.

New York-based Goldman Sachs delayed the sale last week after Moody’s Investors Service placed it under review for downgrade, another person familiar with the matter said at the time. The bank last sold Samurai bonds in January 2008, when it raised 148.5 billion yen, according to data compiled by Bloomberg.

“I thought the spreads would be tighter than this,” Yoshihiro Nakatani, a Tokyo-based senior fund manager at Asahi Life Asset Management Co., said in a phone interview today. “The five-year maturity of the fixed-rate bonds is a disadvantage for investors, given their price volatility.”

Record Start

Goldman Sachs initially marketed the fixed-rate notes to yield 170 basis points to 195 basis points more than the yen swap rate before price guidance was raised to a 195 basis point to 210 basis point spread, the person said on Feb. 17.

Hiroko Matsumoto, a spokeswoman at Goldman Sachs in Tokyo, declined to comment on the sale when contacted by telephone today.

Goldman Sachs’ sale would make 2012 the busiest start to the year on record for yen-denominated notes issued by overseas companies, according to data compiled by Bloomberg.

To contact the reporters on this story: Yusuke Miyazawa in Tokyo at ymiyazawa3@bloomberg.net; Rachel Evans in Hong Kong at revans43@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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