Japan yield hunt ushers in longest Samurai

martes 15 de julio de 2014 05:13 GYT

By Frances Yoon

HONG KONG, July 15 (IFR) - Growing demand for higher-yielding assets has allowed Mexico to sell its longest yen bond, offering a sign that Japan's reforms are adding to risk appetite in the country's capital markets.

The Government of the United Mexican States priced a three-part ¥60bn (US$592m) Samurai bond on Tuesday that included an unprecedented 20-year tranche. Samurai bonds refer to yen securities sold by foreign governments or companies in Japan's domestic market.

Only the World Bank and European Investment Bank, both rated Triple A, have sold Samurai bonds at maturities beyond 15 years since the 2008 financial crisis.

With a rating six notches lower, Mexico shows that Japanese investors are turning to riskier credits and longer maturities to boost returns.

"Japanese investors are tired of tightening spreads and low yields," said a Tokyo-based banker. "They've been suffering."


Mexico raised ¥12.3bn at a 2.57% coupon from the 20-year tranche, after adding the long-dated piece to meet demand from investors, including pension funds.   Continuación...