(Bloomberg) – Berkshire Hathaway Inc. by Warren Buffett plans his second yen bond sale this year, boosting profits for trading houses on speculation it wants to boost investment in Japan.
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Berkshire hired BofA Securities Inc. and Mizuho Securities Co. for a potential offering of yen-denominated senior unsecured bonds on the global market. The company is a regular issuer of yen bonds and last sold such debt in April, in the company’s biggest deal since it first came to market in 2019.
The company’s fundraising plans are being closely watched by stock market investors as Buffett has bought stakes in trading firms, helping to push Nikkei 225 shares to a record high earlier this year. Veteran investor Buffett said in his annual letter in February that Berkshire has funded most of its investments in Japanese companies through yen bond offerings.
Berkshire had about ¥1.41 trillion ($9.8 billion) worth of yen bonds outstanding as of Oct. 1, according to data compiled by Bloomberg.
“There is still more room for Berkshire to increase its stake in trading houses,” said Takehiko Masuzawa, head of equity trading at Phillip Securities Japan. For the Japanese stock market in general, “this is good news for those who want to buy, and it will give them the boost they need.”
Shares of Japanese trading houses outperformed in Tokyo, with a benchmark for companies on the Topix closing 2.6% higher. That compared to 1.7% for the broader index. Both Itochu Corp. as Mitsui & Co. rose 3.6%.
The excess yield on Berkshire’s 2027 bonds – one of the most widely traded yen bonds – was about 60 basis points on Monday, according to data compiled by Bloomberg. The notes were sold in April at a spread of 51 basis points. Average yield premiums on yen bonds in a Bloomberg index fell to 44.8 basis points from about 58 basis points at the start of the year.
–With help from Finbarr Flynn.
(Adds the outstanding amount of yen bonds in the fourth paragraph, updates the chart to show the total issuance volume, updates the stock prices.)
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