Tokyo bourse to delay corporate bond market start over nuke crisis

Japan's ongoing nuclear crisis will delay Tokyo Stock Exchange's plan to launch a corporate bond market as it has sapped the appetite of firms to sell debt, the head of the venture said. "No one is committing at the moment," Tetsutaro Muraki who is leading the bourse's corporate bond initiative, told Reuters in an interview.
Companies are disinclined to pursue bond issues while uncertainty remains over the radiation leak at the Fukushima Daiichi plant operated by Tokyo Electric Power Co , Japan's biggest corporate bond issuer. Conceived in November, the TSE's corporate bond market, dubbed Tokyo Pro-Bond, was supposed to have been ready for business by as early as March, with a goal of eventually capturing several percent of Japan's publicly traded corporate debt worth about 11 trillion yen ($133 billion).
The market was adapted from AIM (Alternative Investment Market), a joint venture between the Japanese bourse and the London Stock Exchange. Launched in 2009 their goal was to win new public offerings from foreign and local firms with looser listing rules.
That market, however, failed to attract any companies to offer shares as IPOs in Japan dried up in the wake of the financial crisis following the failure of Lehman Brothers. Final government approval that would leave the new company debt market poised for its first bond issue, will probably be granted in May, Muraki said.
"We hope to get something this year," he said, when asked when he expected to see the first capital raising on Tokyo Pro-Bond. The crisis at Tokyo Electric, commonly known as TEPCO, has filtered through to the corporate bond market as the utility accounts for about 5 trillion yen, or 8 percent, of Japan's 70 trillion yen of company debt.
After the March 11 earthquake and tsunami that triggered the disaster in Fukushima, the central bank quadrupled the overall limit on corporate bonds it can hold in its asset purchase programme to 2 trillion yen in a bid to calm markets.
However, it kept the maximum holding for a single company's bonds unchanged at 100 billion yen, severely limiting the amount of TEPCO debt it could purchase from anxious bond holders, including pension funds and life insurers. The longer term hope for Tokyo Pro-Bond, explained Muraki, is that a post-quake spurt in capital raising by companies looking for cash when uncertainty has eased will help secure the markets first issuance.