Mitsubishi Estate raises ¥250 billion in biggest bond sale of year


Mitsubishi Estate Co. raised ¥250 billion in the biggest Japanese corporate bond sale so far this year and the latest jumbo offer luring yield-hungry yen fixed-income investors with riskier notes.

The four-part deal sold by Japan’s largest property developer by market value included ¥75 billion of 60-year notes that can be called after five years, according to a statement Thursday from sale manager Mitsubishi UFJ Morgan Stanley Securities Co. The bonds sold at a yield of 1.02 percent, compared with about 0.01 percent interest on five-year Japanese government notes.

The sale follows a ¥165 billion placement of perpetual subordinated notes by Nomura Holdings Inc. earlier this month that pay a coupon of 3.36 percent to June 2021. Japanese companies last year issued about ¥2.3 trillion of subordinated yen debt that is repaid after senior bonds in a bankruptcy, the most in six years, data show.

“For issuers, there has never been an easier time to sell,” said Mana Nakazora, the chief credit analyst in Tokyo at BNP Paribas SA. “Fixed investors are looking for good Japanese corporate names, with high ratings in offerings such as this” that pay additional spread, according to Nakazora.

Mitsubishi Corp. issued ¥200 billion of subordinated notes in June, including 60-year, 1.31 percent debt that can be called in five years. SoftBank Group Corp. last January sold ¥450 billion in subordinated bonds that pay a coupon of 2.5 percent to individual customers.

Mitsubishi Estate has an AA- grade from Japan’s Rating & Investment Information Inc., the fourth-highest level.