Corporate borrowers are turning to Japan for cash that is becoming increasingly hard to get anywhere else in the world.
Debt sales in Japan by overseas issuers from Bentonville, Ark.-based Wal-Mart Stores Inc., the world's largest retailer, to Zurich-based bank UBS AG rose 37 percent to ¥2.03 trillion this year from the same period of 2007, data compiled by Bloomberg show. Sales of so-called samurai bonds may exceed ¥3 trillion this year for the first time since 1996, according to Merrill Lynch & Co.
The lowest Japanese government-bond yields in three years are encouraging investors in the world's second-largest economy to buy higher-coupon corporate debt. Wal-Mart's offering of ¥100 billion in samurai bonds on July 24 was the first by a foreign retailer in 29 years. The 2.01 percent coupon on the five-year portion of the sale was less than the 4.25 percent on similar-maturity notes sold in the U.S. on April 8.