Global financial institutions are expanding debt capital market teams in Japan to capture a fundraising boom driven by M&A and AI capital. In July, Goldman Sachs hired Dai Kitatani, former head of DCM at Citigroup Japan, as head of DCM operations, while UBS Securities appointed Takehiro Sakuramoto, formerly of Goldman Sachs, as its first dedicated DCM head in four years. Nomura Securities created a new unit dedicated to corporate bond issuance, separating debt and equity underwriting functions. Sales of foreign-currency debt by domestic companies reached about $91.8 billion in the first half of the fiscal year from April through September, surpassing the previous record of $75.1 billion set in the same period a year earlier. Japan's domestic corporate bond market has gotten busier, supported by booming corporate funding needs. Issuance in the first half rose 10% from a year earlier to a record ¥10.6 trillion ($67 billion). Soft Bank Group Corp.'s ¥1 trillion retail bond sale in September and subordinated bond issuance by Japan's megabanks helped boost the overall total. Google parent Alphabet Inc. raised ¥576.5 billion in its debut yen bond offering in May, the largest-ever yen bond sale by an overseas issuer.
Foreign-currency bond issuance by Japanese companies is increasing, including from debut issuers. Such issuance tends to be more expensive than domestic bonds after the proceeds are swapped back into yen, but overseas markets can absorb larger deals. Goldman plans to leverage its relationships with Japanese companies and use foreign-currency bond mandates as an entry point to win more lead-manager roles across its broader DCM business. HSBC Securities is adding staff and aims to leverage its network of Asian investors to win foreign-currency bond mandates from Japanese companies. Kitatani said the trend of foreign-currency bond issuance is expected to continue.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing