Japan bond squeeze keeps Samurai market on a roll

viernes 15 de agosto de 2014 02:37 GYT

* Foreign borrowers eye yen bonds for cheap funding

* Monetary easing forces Japanese investors into new markets

* Samurai bonds largely immune to global tensions

By Frances Yoon

HONG KONG, Aug 15 (IFR) - Governments and financial institutions are lining up to sell bonds to Japanese investors as they look to take advantage of record-low yen funding costs in a market that remains isolated from global geopolitical tensions.

BNP Paribas and Svenska Handelsbanken are looking to issue Samurai bonds as early as next month, while Turkey is also mulling a deal that would be guaranteed by the Japan Bank for International Cooperation (JBIC), according to bankers familiar with the plans.

The governments of Kenya, Hungary, Indonesia and Poland are also examining the possibility of issuing sovereign Samurai bonds in the second half of the fiscal year, while a diverse range of Asian issuers are also forecast to come to the yen market, including Development Bank of Mongolia and Export-Import Bank of Korea.

Mexican state-run oil company Pemex is also considering a Samurai issue, treasurer Rodolfo Campos told IFR in July.

The growing pipeline comes as the Bank of Japan's monetary easing programme has driven yields on domestic bonds to ultra-low levels, pushing more Japanese investors to consider overseas credits in search of higher returns.   Continuación...