Nomura Tops Samurai Ranking First Time Since 2001: Japan Credit

Nomura Holdings Inc. (8604) leapt to the top spot for underwriting Samurai bonds this year, the first time since 2001, as Japan’s biggest brokerage brought the most new issuers to market.

The bank managed 385.1 billion yen ($4.5 billion) of yen note sales by overseas borrowers, or 19.3 percent of the market, followed by Mizuho Financial Group Inc. (8411) with 19.1 percent and Daiwa Securities Group Inc. (8601)’s 14.6 percent, according to data compiled by Bloomberg. Nomura, which arranged five debut deals this year, was fourth in 2011, after Daiwa, Mizuho and Mitsubishi UFJ Morgan Stanley Securities Co., the data show.

Japanese investors are seeking premiums offered by overseas issuers as the average yield on benchmark government debt in 2012 slid to the lowest since at least 1986. Sales of yen- denominated bonds by foreigners climbed to the highest since 2008, according to data compiled by Bloomberg. The average yield paid by Samurai issuers this year was 1.35 percent, almost twice the rate offered by Japanese companies and less than half of what corporates pay worldwide, Bank of America Merrill Lynch indexes show.

“The overseas borrowers are in a position to offer more attractive spreads compared with similarly-rated domestic debt, creating a good match between investor and issuer needs,” Shohei Takahashi, joint-head of international debt capital markets at Nomura, said in an e-mailed response to Bloomberg questions. “This environment will probably continue next year.”

Photographer: Kiyoshi Ota/Bloomberg

The Nomura Securities Co. logo is seen on a glass door of the company's branch in Tokyo. Close

The Nomura Securities Co. logo is seen on a glass door of the company's branch in Tokyo.

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Photographer: Kiyoshi Ota/Bloomberg

The Nomura Securities Co. logo is seen on a glass door of the company's branch in Tokyo.

Samurai Newcomers

Nomura helped arrange debut bond sales of Nordea Bank AB, the third-biggest issuer of Samurai this year, as well as DNB Bank ASA, Societe Generale SA, BPCE SA and Qatar Petroleum, according to data compiled by Bloomberg.

Offerings of Samurai bonds this year, combined with yen notes listed on the Tokyo Pro-Bond Market that started in April, totaled 2.22 trillion yen, versus 2.14 trillion yen in 2011 and 2.06 trillion yen in the previous year, according to data compiled by Bloomberg. That’s the highest since 2008 when companies including Australia & New Zealand Banking Group Ltd. and Citigroup Inc. sold a total 2.31 trillion yen of Samurai bonds, the data show.

Japanese companies raised 8.2 trillion yen in bond offerings this year, 1 percent less than in the same period in 2011, according to data compiled by Bloomberg.

Corporate Pipeline

JPMorgan Chase & Co. was the fourth-largest Samurai underwriter, managing 13.9 percent of deals, the data showed. That’s the highest ranking for the U.S. bank since 2007 and compares with the seventh position last year, the data show.

“The fact that we are such a big bank globally helps us with overseas relationships,” Chris Abbott, vice president at the lender’s cross-border yen syndication, said in a telephone interview Dec. 19. “We hope to prove to the world that we are a powerhouse not just in the global bond market, but in yen as well.”

Elsewhere in the domestic credit markets, Sumitomo Mitsui Trust Bank Ltd. hired Daiwa, Nomura and SMBC Nikko Securities Inc. for a sale of five-year bonds next month, Daiwa said in a statement yesterday. Sumitomo Mitsui Banking Corp. announced plans to price 10-year subordinated bonds for individual investors on Jan. 11 in a filing with Japan’s Finance Ministry.

The benchmark 10-year bond yield rose 1/2 basis point to 0.77 percent as of 9:16 a.m. in Tokyo. The yen traded at 85.14 against the dollar, weakening past 85 for the first time since April 2011.

Corporate bonds in Japan have returned 1.4 percent this year, compared with the 2 percent gain for the nation’s sovereign debt and 4.8 percent for Samurais, according to Bank of America Merrill Lynch indexes. Company notes worldwide have returned 10.5 percent.

“Next year should bring an increase in issuance as many overseas borrowers see untapped capital potential in Japan,” said Takao Okubo, head of global capital markets promotion department at Mizuho Securities Co. “The appeal of Japanese investors is in their stability.”

To contact the reporter on this story: Yusuke Miyazawa in Tokyo at ymiyazawa3@bloomberg.net

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

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