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By Warren Buffett Berkshire Hathaway Inc. began marketing a multi-Yen tranche bond agreement on Monday, several months after announcing investments in Japan’s largest trading companies.
Berkshire Hathaway is offering yen notes for the third year in a row, with the goal of Four-part yen deal that could be priced on Thursday, according to an email from JPMorgan Chase & Co., one of the bookmakers on the deal. The proceeds will be used for general corporate purposes. The conglomerate sold 430 billion yen ($ 3.89 billion) of the securities in its inaugural deal in 2019, which was one of the largest sales by a foreign issuer in yen.
The US firm said in August that it had acquired about 5% stakes in Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. and Sumitomo Corp. Buffett, the chairman and CEO of Berkshire Hathaway, did not. do any big investment in 2020, but the company bought its own stock and is sitting on $ 138 billion in cash.
The company said last year that it planned maintain your investments in Japanese business houses for the long term and you could increase your stake in any of the five to 9.9%.
Berkshire Hathaway also plans to roll over $ 1 billion in notes that expired on March 15 from the proposed yen debt offering, under the terms of the deal.
Debt demand
Demand for corporate bonds in the yen market has been strong this year as the Bank of Japan’s negative interest rate policy has prevented corporate debt yields from rising sharply, despite volatility. Nagoya Railroad Co.’s five-year bond, which posted a 0.09% coupon last month, garnered near demand nine times the size of the issue.
Berkshire Hathaway is offering a 17-20 basis point five-year bond on mid-swaps, which at current market levels equates to a coupon of around 0.2%. The deal also includes 10, 15 and 20-year notes, with expected ratings from Moody’s Investors Service and S&P Global Ratings higher than those given to the Japanese sovereign.
Berkshire Hathaway has yen bonds maturing from 2023 to 2060. While the 2023 note has returned around 0.01% this year, longer-term notes have plummeted as their yields have increased more. The price of the 2060 ticket fell to 92.55 yen on Friday from 97.3 yen at the end of last year, according to data compiled by Bloomberg.
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