Commonwealth Bank of Australia Ltd, Australia's second-biggest lender, has mandated Daiwa SMBC, Nikko Citi and Nomura for a Samurai bond offering, a source briefed on the deal said on Friday. The deal is expected to be priced in the near future subject to market conditions, said the source, who was not authorised to speak to the media about the transaction and asked not to be identified.
Roadshows will take place next week in Japan. The source said the size of the offering had not yet been determined. Samurai bonds, yen bonds sold by overseas entities in Japan, have flourished since the credit crunch hit last August. Japanese investors are starved for returns as yields on government bonds are very low.
Samurai bonds tend to offer higher coupons than debt from Japanese issuers with similar credit ratings. While the cost of raising funds has spiked along with the tighter conditions in credit markets, the Samurai market is still an attractive option for some overseas banks, in particular Australia's largest banks.
More than 302 billion yen ($3 billion) has been raised by Australia's major banks so far this year with Australia & New Zealand Banking Group Ltd's 135.8 billion yen representing the largest Samurai bond ever completed from Australia. CBA's planned offer would be its second Samurai issue, following a 60 billion yen transaction in November. Analysts said the Samurai bond issue is timely because of a particularly attractive cross currency swap for Australian issuers.
Comments
Comments are closed.