Latest news with #bondissuance
Bloomberg
an hour ago
- Business
- Bloomberg
Japan Set to Cut Super-Long Bond Issuance by More Than Expected
Japan is planning to cut the issuance of super-long bonds this year by more than earlier reported, after record levels of volatility in super-long yields in recent months stoked market concerns. The Finance Ministry proposed reducing the issuance of 20-, 30- and 40-year bonds by a total of ¥3.2 trillion ($22 billion) through the end of March 2026, according to a plan presented by the ministry during a meeting with primary dealers on Friday.
Yahoo
7 hours ago
- Business
- Yahoo
Japan to Sound Out Market Players on Tweaks to Bond Issuance
(Bloomberg) -- Japan's Finance Ministry will seek feedback from market players later Friday over its planned reductions to super-long bond issuance as it takes steps to quell market turbulence. Security Concerns Hit Some of the World's 'Most Livable Cities' JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown One Architect's Quest to Save Mumbai's Heritage From Disappearing The ministry will hold a meeting with primary dealers at 4 p.m. in Tokyo to discuss recent market developments and its issuance plans. A draft of its revised bond plan seen by Bloomberg showed that authorities will propose cutting issuance of 20-, 30- and 40-year bonds by ¥100 billion ($690 million) each per auction through March 2026. To offset the reduction in sales of longer maturities, the ministry is looking to increase issuance of 2-year and shorter-dated debt, the plan showed. The meeting will be closely monitored by traders as they look to confirm those figures and gain further clarity over the ministry's plans following recent yield spikes in Japan that have rippled across global markets. 'Since April, we've seen a significant rise in yields on super-long bonds, compared to other maturities,' Finance Minister Katsunobu Kato told reporters on Friday. 'I expect we'll hear some views on this fiscal year's issuance plan as well,' he said, referring to the primary dealers' meeting. Market participants estimate that a reduction of roughly ¥300 billion in the combined issuance of super- long-term bonds per auction from a current average of ¥2.3 trillion is needed to ensure a better match of supply and demand. That's a reduction in line with the plan seen by Bloomberg. Any cuts of a smaller magnitude could spook investors and trigger a selloff, raising the risk of another sharp rise in yields. 'If the issuances of 20-, 30- and 40-year bonds are cut by ¥100 billion each, along with similar reductions for the liquidity enhancement auctions, it's likely to avoid triggering disappointment-driven selling,' said Naoya Hasegawa, chief bond strategist at Okasan Securities. 'Given recent heavy trading in super-long bonds, there's even some expectation that the 30-year issuance could be cut by as much as ¥200 billion,' he added. Japanese government bond yields dropped on Thursday afternoon in Tokyo, with intermediate notes outperforming after a 5-year government bond sale drew strong demand. The market had already largely priced in the scale of the reductions, said Kazuhiko Sano, chief bond strategist at Tokai Tokyo Securities, in a report on Friday. The imbalance in supply and demand has been triggered largely by the Bank of Japan's decision to step back from the market after dominating purchases in recent years. Since last summer the BOJ has slashed its buying after more than a decade of quantitative easing left it holding more than half of Japan's outstanding central government debt. But the reduced buying from the central bank has not been matched by increased purchases from private-sector banks and life insurers. That gap has fueled much of the choppy downward pressure on bond prices and pushed up yields. Finance Minister Katsunobu Kato reiterated in a Bloomberg interview last week that mid-year revisions to the bond issuance plan are possible, signaling to markets that adjustments might be underway. The planned move by the ministry should limit the increase in supply of super-long bonds and follows a decision earlier this week by the BOJ to slow down its withdrawal from the market from next April, a move that will support demand down the line. The BOJ now pledges to slow quarterly reductions of its bond purchases to ¥200 billion from the current ¥400 billion. Last month, weak demand at auctions sent yields on 30- and 40-year bonds to record highs. The selloff was also driven by growing concerns over Japan's fiscal trajectory. The finance ministry has pushed back on speculation that it might also try to help ease concerns over insufficient demand by buying back bonds as soon as next month, calling that unrealistic. The ministry will explain its stance on buybacks at Friday's meeting with market participants, according to a person familiar with the matter. Even if the planned adjustments go ahead, the finance ministry will still face the challenge of finding alternative investors to absorb the slack as the central bank continues its tapering. Under the BOJ's latest plans, its monthly purchases of JGBs would shrink to around ¥2.1 trillion, and its total holdings would slide to about ¥490 trillion, by the end of March 2027. Japan remains heavily reliant on bond issuance to finance spending. Japan's projected debt-to-GDP ratio of 232.7% this year is still the highest among developed economies, feeding into concerns about the nation's fiscal stability. About a quarter of the initial budget for fiscal 2025 was allocated to debt-servicing costs alone, underscoring the country's vulnerability to rising yields. The concerns have been fanned by policy measures floated by political parties ahead of a national election in July. Parties are preparing to unveil costly proposals aimed at securing voter support. The ruling Liberal Democratic Party is planning yet another round of cash handouts to households. The Democratic Party for the People, a key opposition force, has called for cutting the national sales tax to 5% across the board, a more expensive choice, with additional bond issuance floated as a possible funding source. Against this backdrop, investors are in need of reassurance that the balance of supply and demand in the JGB market will be restored without yields rocketing. --With assistance from Mia Glass. (Adds finance minister comments, yesterday's market reaction.) Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants ©2025 Bloomberg L.P. Sign in to access your portfolio
Bloomberg
12 hours ago
- Business
- Bloomberg
Japan to Sound Out Market Players on Tweaks to Bond Issuance
Japan's Finance Ministry will seek feedback from market players later Friday over its planned reductions to super-long bond issuance as it takes steps to quell market turbulence. The ministry will hold a meeting with primary dealers at 4 p.m. in Tokyo to discuss recent market developments and its issuance plans. A draft of its revised bond plan seen by Bloomberg showed that authorities will propose cutting issuance of 20-, 30- and 40-year bonds by ¥100 billion ($690 million) each per auction through March 2026. To offset the reduction in sales of longer maturities, the ministry is looking to increase issuance of 2-year and shorter-dated debt, the plan showed.
Zawya
a day ago
- Business
- Zawya
Ahlibank demonstrates market leadership in DCM with successful oversubscription of United Finance Company's senior bond issuance
Muscat: Reinforcing its position as a leading player in the Sultanate of Oman's debt capital markets (DCM), ahlibank has successfully acted as Issue Manager for the OMR 15 million senior bond issuance by United Finance Company (UFC), comprising a base issue of OMR 10 million and a fully exercised greenshoe option of OMR 5 million. The transaction had a novel structure of being the first senior bond issuance by a Finance and Leasing Company (FLC) in recent years. This structure enabled the three-year issuance to price competitively at a coupon of 7.00% pa. Commenting on the success, Hanaa Al Kharusi, Senior General Manager, Wholesale Banking at ahlibank said, 'We continue to remain the #1 issue manager for fixed income issuance for private issuers on the Muscat Stock Exchange. At ahlibank, we remain committed to empowering Omani corporates through bespoke capital-raising strategies that are both efficient and market-responsive. The successful execution of this bond issuance underscores our advisory strength, our distribution expertise, and our ability to navigate market dynamics with precision, positioning ahlibank as a trusted partner in accelerating corporate growth through capital market access.' The issuance garnered robust investor interest with total demand of OMR 17.2 million, reflecting a 1.7x oversubscription underscoring ahlibank's capability in structuring and delivering high-impact capital market transactions. The private placement received over 60 applications, representing the highest level of investor participation for any comparable corporate bond issuance in recent years. This issuance was ahlibank's fourth bonds issuance in the FLC sector with all four issuances achieving oversubscription. The strong momentum surrounding the offering illustrates growing market confidence—not only in the issuer, but also in ahlibank's execution expertise and market-readiness. Notably, the transaction drew a well-diversified investor base, with participation from high net worth individuals, banks, government entities, corporates and asset managers. The diversity of this participation is a direct reflection of ahlibank's ability to deliver well-structured investment opportunities that resonate across stakeholder segments. Meanwhile, the depth of engagement reaffirms the bank's standing as a trusted financial intermediary within Oman's evolving capital markets landscape. The successful closure of this issuance further solidifies ahlibank's position in the investment banking space, reinforcing its long-term strategic objective of diversifying revenue streams and deepening its leadership in Oman's capital markets. Beyond its institutional significance, the transaction also serves as a market catalyst, demonstrating the viability of capital market instruments as an effective financing avenue for corporates, particularly those within the non-bank financial sector. As ahlibank continues to strengthen its investment banking capabilities, the bank remains committed to fostering a resilient, innovation-led capital market ecosystem that contributes meaningfully to Oman's long-term economic diversification agenda.
Yahoo
a day ago
- Business
- Yahoo
Exclusive-Japan plans to cut super-long bond sales by 10% to ease market concerns, draft shows
By Takaya Yamaguchi TOKYO (Reuters) -Japan's government plans to cut sales of super-long bonds by about 10% from the original plan in a rare revision to its bond programme for the current fiscal year, trimming overall bond issuance as a result, a draft document seen by Reuters showed. The move aims to soothe market concerns over supply-demand imbalances, after weak demand at recent auctions and a surge in super-long yields to record high levels last month rattled the bond market. The step also follows the Bank of Japan's decision this week to decelerate the pace of bond purchases reductions from next fiscal year, signalling its preference to move cautiously in removing remnants of its massive, decade-long stimulus. The revised issuance plan will be presented to primary dealers for discussion at a meeting on Friday. Additionally, there are also ideas of buying back some previously issued super-long JGBs with low interest rates to improve the supply-demand balance. The planned reduction in 20-, 30- and 40-year super-long bond sales would be partly offset by increased issuance of shorter-term notes, as well as bonds specifically designed for households. As a result, the total Japanese government bond (JGB) scheduled sales for the year through next March are set to fall by 500 billion yen ($3.44 billion) to 171.8 trillion yen, according to the draft of the revised bond programme. Issuing a larger amount of shorter-term bonds, however, would require a careful balancing act as the government would need to roll over debt more frequently and make its finances more vulnerable to bond market swings. Specifically, the revised plan calls for reducing 20-year JGB sales by 900 billion yen to 11.1 trillion yen, 30-year JGBs by 900 billion yen to 8.7 trillion yen and 40-year JGBs by 500 billion yen to 2.5 trillion yen. This means starting next month, sales of each of these tenors will be cut by 100 billion yen at every auction. Instead, the government will boost sales of two-year debt, one-year and six-month treasury discount bills by 600 billion yen each. At every auction starting October, sales of two-year debt will be raised by 100 billion yen to 2.7 trillion yen. The government will also increase issuance of principal-guaranteed JGBs for households by 500 billion yen. The original plan had called for cuts in 30- and 40-year bond sales to reflect shrinking demand from life insurers who mostly completed purchases of longer-dated bonds to comply with new solvency regulations. But as the worsening finances of advanced economies drew more market scrutiny, super-long JGBs became a target of a global bond selloff last month. ($1 = 145.1500 yen) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
