EAccess Ltd., the first new entrant to Japan's mobile-phone market in 13 years, said Monday it canceled a planned bond sale because of unfavorable market conditions.
The Tokyo-based company Feb. 21 submitted an application to the Finance Ministry to sell as much as ¥100 billion in bonds in the coming two years. The proceeds were to be used for repaying debt and for capital investment, the filing said.
Investors are demanding higher returns to buy debt on concerns that the U.S. economy may sink into a recession. The cost of protecting Japanese bonds against default rose to a record Monday, according to traders of credit-default swaps.
"There is nothing wrong with the credit strength of Japanese companies, but the market is affected by the U.S. and Europe," said Jun Miyata, a fixed-income fund manager at T&D Asset Management Co. in Tokyo, which manages $32.6 billion in assets. "Japan's credit-default swaps keep widening every day."
Credit-default swaps are used to speculate on changes in the ability of borrowers to repay debt.
EAccess sold ¥50 billion in five-year bonds in March 2005, which yielded 182 basis points more than the yen swap rate Friday. A basis point is 0.01 percentage point.