Nippon Yusen K.K. is taking advantage of falling government note yields and a void in corporate debt sales to borrow at the lowest rate in eight years even as global trade growth slows.
The shipping line plans to issue ¥25 billion worth of bonds maturing in 2021 with a 1.218 percent coupon, the carrier’s lowest for a 10-year security since February 2003, according to data compiled by Bloomberg.
A.P. Moeller-Maersk A/S, the biggest shipping line, issued seven-year debt in November with a 4.375 percent coupon.
Demand for corporate debt issues is rising as electric companies retired ¥905 billion more in bonds than they issued since the March 11 earthquake and tsunami and the Fukushima nuclear crisis.
Japan’s benchmark 10-year bond yield fell to the lowest this year in August, reducing rates for corporate issuers such as Nippon Yusen as investors fled to the safety of fixed-income securities as equity markets plummeted.
“It’s good timing,” said Toshiyasu Ohashi at Daiwa Securities Capital Markets Co. “Firms can get very low rates by issuing bonds now. There’s a worldwide slowdown in growth and a lack of sales by utilities is making for very good supply conditions.”
Nippon Yusen’s debt has gained this year, pushing the yield on the 1.782 percent bonds due in August 2019 down to 0.865 percent, the lowest since Oct. 12. The yield peaked at 1.37 percent on Feb. 16.
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