Tokyo: Warren Buffett’s Berkshire Hathaway has raised 281.8 billion yen or about US$1.9bil in a seven-tranche yen-denominated bond deal, its largest sale in the Japanese currency in five years, a term sheet reviewed by Reuters yesterday shows.

The yen bond issue signals Buffett’s deepening association with Japan’s capital markets after its equity stake buys in the nation’s top five trading houses over the past four years.

The US investment company issued bonds with tenors of three, five, seven, 10, 20, 28 and 30 years, according to the term sheet.

The three-year tranche was the largest with 155.4 billion yen raised. The five-year bond raised 58 billion yen.

Longer-dated bonds were added during the transaction and a proposed 15-year tranche was dropped, messages sent from the deal’s bookrunners showed.

Final prices for each of the tranches were set at the lower to middle end of the revised price guidance given to investors, term sheets showed.

The deal was the largest yen-denominated bond issuance for Berkshire Hathaway since 2019 when it first issued yen, or Samurai, bonds

Berkshire Hathaway said in a US Securities and Exchange Commission filing the proceeds raised in the deal would be used for general corporate purposes. It did not disclose the size of the deal in the filing.

The firm first announced it would buy stakes in Japan’s trading houses in 2020 with the intention of holding them long-term and increasing ownership to as much as 9.9%.

Since then, it has raised its stake in Japan’s top five trading firms to around 9% each, according to its annual report dated Feb 24.

It sold 263.3 billion yen of bonds in April.

“Berkshire’s yen bond sales this year is the biggest in a year since it started selling yen bonds and this indicates their expectations for upside of Japanese stocks,” said Takehiko Masuzawa, trading head of Phillip Securities Japan.

“The market is looking at what kind of stocks will be their next target. Investors see value stocks which pay higher dividends, such as banks and insurers, will be the most likely targets.” 

 - Reuters