• Bloomberg


In these times of crisis, India’s top companies are leaning on Japanese lenders for funding.

From Mukesh Ambani’s Reliance Industries Ltd. to Tata Capital Financial Services Ltd., the nation’s biggest firms have raised a record ¥181 billion ($1.7 billion) from yen-denominated loans this year, helping them to tide over a crunch in the dollar market.

With benchmark sovereign yields in Japan falling back below zero on increased stimulus from the central bank, the country’s banks are hungry for higher-yielding assets. India’s biggest companies are turning to them for relatively cheap money as the coronavirus pandemic roils the economy. Access to overseas loans for refinancing is critical for Indian firms, whose offshore debt bill for this year comes to an unprecedented total of about $31 billion.

Dollar funding has become more costly this year amid turmoil in global financial markets. The price of raising yen has risen more slowly, boosting the appeal of fundraising in the currency. Average margins on dollar loans exceed those on yen loans by the most since 2018, according to Bloomberg-compiled data.

Japan’s bellwether 10-year government bond yield dropped below zero again last month and went lower after central bank said it will put no limit on buying sovereign notes to support the economy during the coronavirus pandemic. The yield had risen to 0.08 percent in March, the highest in more than a year.

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