Politics
Japan’s Convertible Bonds Regain Favor as Rates Continue to Rise
Key Points
Japan’s Convertible Bonds Regain Favor as Rates Continue to Rise Japanese companies have sold the highest amount of convertible bonds in more than two decades in the first half, turning to the cheaper financing alternative as interest rates continue to climb. These companies issued ¥1 trillion ($6.2 billion) of the debt-equity hybrid, which can be sold to investors at lower coupons by enticing them with the possibility of higher returns if stock prices go up. That was the highest tally for...
Japan’s Convertible Bonds Regain Favor as Rates Continue to Rise
Japanese companies have sold the highest amount of convertible bonds in more than two decades in the first half, turning to the cheaper financing alternative as interest rates continue to climb.
These companies issued ¥1 trillion ($6.2 billion) of the debt-equity hybrid, which can be sold to investors at lower coupons by enticing them with the possibility of higher returns if stock prices go up. That was the highest tally for the first half since 2004, fueled by large deals such as Nippon Steel Corp.’s ¥600 billion sale — which was the biggest ever Japanese convertible bond issue — and JX Advanced Metals Corp.’s ¥250 billion offering.