Buffett's Berkshire to issue first-ever yen bonds

Possible $940m offering targets Japan's yield-hungry investors.

Warren Buffett's Berkshire Hathaway is looking to diversify its fundraising.   © Reuters

Warren Buffett's Berkshire Hathaway is looking to diversify its fundraising. © Reuters

Berkshire Hathaway, run by billionaire Warren Buffett, will issue yen-denominated bonds for the first time as early as early September as it explores new funding sources outside the U.S., Nikkei has learned.

The issuance could total over 100 billion yen ($939 million) and have a maturity of five years or more, though details have yet to be ironed out. The investment fund is currently researching market demand.

Berkshire will target mainly Japanese institutional investors, such as asset managers and insurers, but will make it a global bond offering open to overseas investors as well. Japan's investors are eager for any yield at all given the country's persistently negative interest rates. The new bonds are expected to carry ultralow coupon rates.

Berkshire is rated AA by Standard & Poor's, higher than Toyota Motor's AA- rating.

Most of Berkshire's investments are in the U.S., and funds raised through the new issuance will likely be converted into dollars. Doing so will cost more than simply issuing dollar-denominated bonds. But having more diverse sources of funding would allow Berkshire to set more favorable terms on its investments during a period of market turmoil.

Goldman Sachs, JPMorgan Chase, Bank of America Merrill Lynch and Mizuho Americas have been named lead underwriters.

Other big foreign floats of yen-denominated bonds include Apple's 250 billion yen offering in 2015 and Starbucks' 2017 issuance. MetLife also issued yen bonds earlier this year.


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