By Anton Bridge and Miho Uranaka
TOKYO (Reuters) -Japanese tyre maker Bridgestone has more than halved the value of a planned bond offering to about 50 billion yen ($350.56 million) as underwriters continue to gauge demand for the issuance, two sources with knowledge of the matter said.
The company has also decided to do away with the proposed seven-year term in the bond offer series that also included other tenors, said the sources, who declined to be named as the information is not public.
Bridgestone declined to comment on the operation.
The sale by the tyre maker, which has an investment grade credit rating, is seen as a litmus test for market sentiment. While the offer value is lower than hoped, there are signs that the corporate bond market is stabilising, market players say.
Bond issuance has been muted in Asia in the past week since U.S. President Donald Trump’s tariffs sparked ructions in the U.S. Treasuries market, making issuance more expensive across investment grade and high-yield bonds.
Japanese corporate bonds remain popular with retail investors. A 600-billion-yen offering by SoftBank Group has attracted healthy retail demand and some brokerages have already sold out their pre-orders, a SoftBank spokesperson said. The bond will be priced on Friday with a coupon rate of between 3% and 3.6%, SoftBank filings showed.
The decision by SoftBank to proceed with its bond offering comes against the backdrop of market volatility that has upended deals in other countries.
While some Japanese companies have postponed planned issuances, others have won over investors by offering wider spreads to compensate for the current uncertainty and settling for lower fundraising amounts, market players say. All the same, since the announcement of the U.S. tariffs at the start of April, more than 10 firms have postponed or cancelled bond offerings, the two sources said.
Between 700 billion and 800 billion yen ($4.9 billion – $5.6 billion) – making up roughly half the total – of offerings intended for April have been postponed or cancelled so far, said Masahiro Koide, joint head of the capital markets division at Mizuho Securities.
Some of these firms have substituted bond offerings with lower-yield bank loans, Koide said.
Japan has a range of investors with different needs, including pension funds, asset managers, regional banks, agricultural cooperatives and individuals, whose combined demand has helped put a floor under the market.
And unlike during the market turmoil at the start of the COVID-19 pandemic and the 2008 global financial crisis, companies have ample capital, said Dai Otsu, head of debt syndication at Daiwa Securities.
Firms are more attuned to the importance of diversified financing and are returning to bond offerings, Otsu said.
($1 = 142.6300 yen)
(Reporting by Anton Bridge and Miho UranakaEditing by Shri Navaratnam and Helen Popper)
