BloombergTOKYO (Bloomberg) — Barclays PLC became the latest European bank to kick off a yen bond deal on Tuesday after HSBC Holdings PLC and BNP Paribas SA tapped yen investors in the past month for low-cost funding.
Barclays began marketing the Japanese currency notes on Tuesday, in its first Samurai offering since 2015.
The debt may be tapped by regulators to avoid taxpayer bailouts of big financial institutions. HSBC sold ¥160 billion in yen bonds earlier this month that may count toward total loss-absorbing capacity, or TLAC, buffer requirements, which were introduced after the global financial crisis.
Sales in the Samurai market are running at the highest since fiscal 2008, as local investors struggling under the Bank of Japan’s negative interest rate policy lap up the higher-paying yen bonds. Pricing in yen has become more attractive for overseas issuers as dollar funding costs have increased.
Barclays is marketing a two-part deal that includes six-year callable bonds being offered at 100 to 105 basis points over yen swaps, according to a person familiar with the matter who asked not to be identified.
Five-year cross-currency basis swaps show that overseas borrowers in yen wishing to swap back funds into dollars had to pay a premium of about 48 basis points on Tuesday, compared with a three-year average of 71, increasing the attractiveness of the yen market for some issuers.