Berkshire Hathaway is one of the biggest borrowers in yen bond markets, and attracts increased attention given the company’s stakes in a bunch of Japan’s largest trading companies and speculation about how it uses the yen funds.
“Given that Berkshire is currently holding a considerable amount of cash, the fact that it is issuing yen-denominated bonds suggests that it sees investment opportunities in Japan — likely directing funds towards trading companies,” said Hiroshi Namioka, the chief strategist of T&D Asset Management Co.
Berkshire’s issuance is a sign that “Japanese trading houses are still cheap from a global perspective and are considered undervalued, which makes this move positive” for the shares.
Global bond sales have soared to a record this year of about US$6 trillion as borrowers take advantage of easy market conditions to fund everything from the boom in artificial intelligence projects to a revival in acquisitions.
See also: China smashes bond sale records with over US$234b of bids
Berkshire Hathaway’s double A ratings and the potential to pick-up extra spread than on local corporates of comparable credit scores have made the firm’s deals some of the biggest in yen markets in the past.
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