The Nippon Telegraph and Telephone Corp. (NTT) logo outside Otemachi First Square, which houses the company's head office, in Tokyo, Japan. Photographer: Akio Kon/Bloomberg.
Japanese telecom giant NTT Inc. sold $17.7 billion of dollar and euro bonds yesterday, marking the biggest-ever offering by an Asian corporate in the global debt market. NTT’s subsidiary NTT Finance Corp. priced $11.25 billion of dollar-denominated notes in seven tranches, according to a person with knowledge of the matter. The unit also sold €5.5 billion ($6.5 billion) of euro bonds in four parts, said another person, who also asked not to be identified as they’re not authorized to speak publicly. The deal received more than $100 billion of investor orders, with proceeds to be used to help refinance bridge loans that were taken out by NTT to buy its data-center unit.
Japanese companies have ramped up global bond sales over the past month to take advantage of credit spreads, which are hovering near the lowest level since the global financial crisis. Nissan Motor Co. is poised to sell notes denominated in the U.S. currency and euros today.
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“A growing appetite among investors to diversify away from U.S.-centric exposures is driving increased interest in credits from strong jurisdictions such as Japan,” said Andy Suen, co-head of Asia fixed income at PineBridge Investments. “We maintain a constructive view on Japanese Yankee bonds.”
The dollar portion of NTT’s offering is the second-biggest deal this year in the U.S. high-grade market, trailing only the $26 billion of bonds sold in March by Mars Inc. to help fund its purchase of fellow foodmaker Kellanova. The NTT sale also accounted for the bulk of yesterday’s volume.
The longest portion of the NTT deal, a 10-year security, yields 1.17 percentage points more than Treasuries, versus initial price talk of about 1.55 percentage points. The coupon on the bond is just over 5.5%.
Demand for high-quality investment-grade issuance is likely to remain robust on the back of relatively high absolute yields, according to PineBridge’s Suen.
The NTT deal is the largest on record by an Asian corporate in the global bond market, according to data compiled by Bloomberg going back to 1999. The offering brings the total fund-raising by Japanese issuers in the past four weeks to more than $39 billion, capping the busiest-ever such period for the issuance.
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