Japan’s biggest-ever yen corporate bond sale has made this the busiest December since at least 2009 for the market, and the flood of supply is forcing companies to pay more for money.
Panasonic Corp. is marketing a note sale with higher yields than last week’s record ¥1 trillion Nippon Telegraph & Telephone Corp. debt deal. The NTT offering itself priced with what investors called attractive coupons. Daicel Corp. recently sold bonds that had yield premiums several basis points higher than similar-maturity debt issued last month by Haseko Corp., which has the same credit rating.
The tick-up in financing costs may actually show that Japan’s credit market is coming into its own. The NTT sale underscored that the market, small by global standards relative to the nation’s economy, is ready for more expansion. The higher coupons are still low enough to be tolerable for borrowers, while giving yield-starved investors a bit of a lift. And any gradual increase in yields might also be welcomed by authorities who’ve long battled deflation.