Key points
- Foreign yen bond sales reach a record $16 billion
- Alphabet sets a record for a foreign company
- Foxconn follows with a ¥101.9 billion deal
Foreign companies and institutions sold a record ¥2.5 trillion, or about $16 billion, of yen-denominated bonds from April through September, Nikkei Asia reported on October 31.
The total was 2.6 times the amount sold in the same period a year earlier and the highest for any six-month period, according to data compiled by Daiwa Securities and cited in Nikkei's Japanese edition. It includes samurai bonds, which foreign borrowers sell in Japan, as well as yen bonds sold overseas.
Nikkei linked the record to the global fundraising push by AI cloud companies. It highlighted deals from Alphabet (GOOGL), Hon Hai Precision Industry (HNHPF), and Zurich Insurance, and said Japanese companies should prepare for more competition for investors' money.
Alphabet and Foxconn borrowed in yen
Alphabet priced ¥576.5 billion of notes, about $3.6 billion, on May 15, according to its prospectus. It was the biggest yen bond sale ever by a non-Japanese company, Bloomberg reported. The 10-year notes pay 3.189%, compared with 2.67% then on Japan's 10-year government bond. The deal is in our AI debt tracker.
"While US investors are showing signs of fatigue, Japanese investors remain yield-hungry and are willing to snap up paper from big-name issuers such as Alphabet," Taketoshi Tsuchiya, president of Fujiwara Capital, said in May.
On September 4, Hon Hai, also known as Foxconn, said its subsidiary Foxconn Singapore had priced ¥101.9 billion of bonds: ¥65.7 billion of three-year notes at 2.92% and ¥36.2 billion of five-year notes at 3.28%.
Indonesia and Renault also sold samurai bonds
Governments and non-tech companies joined in. Indonesia sold ¥172.1 billion of samurai bonds on April 23, Bloomberg reported. On May 22, French carmaker Renault set terms on ¥159 billion of samurai bonds, its second-largest after a ¥210 billion sale to individual investors in 2022, according to Bloomberg.
In the US dollar market, spreads on AA-rated corporate bonds hit their widest level of 2026 in October as AI-related borrowing grew.
