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Mizuho Bank to issue offshore yuan bond

By Leng Cheng | July 1, 2015, Wednesday | Online Edition

Mizuho Bank, Japan's second-largest lender by assets, plans to issue offshore yuan bond in Japan and list it for the first time on Tokyo's bond market, the company said today.

The lender will manage an offering of a two-year yuan-denominated bond worth about 250 million yuan (US$40.3 million) and sold it at an annual yield of 3.82 percent starting from July 9.

The issue followed Japan's largest lender Bank of Tokyo-Mitsubishi UFJ's 350 million yuan issue on June 24, as the currency continues to gain global importance which triggers the need of a relatively low-cost fundraising in yuan for Japanese companies.

Mizuho said it also get approval from the Tokyo Stock Exchange to list the bond on Tokyo Pro-bond Market, a bond trading market for professional investors such as life insurance companies and local banks.

"We believe that the importance of yuan in global financial markets is continuing to increase," Mizuho said in a statement.

By providing the access to invest in yuan listed securities, Mizuho said it will expand the future flow of trade and investment between China and Japan.

The bond issuance was invested by Development Bank of Japan and country's second largest insurer Dai-ichi Life Insurance Co, with the latter inputting 130 million yuan in the deal. Experts see more megabanks in Japan to issue yuan bond in the near future.

The offshore yuan issuance witness a rising trend among overseas institutions as nearly 70 percent of them are issued by overseas issuers including Hong Kong in the first quarter of 2015, according to data compiled by Thomson Reuters. It compares with a 56 percent in the fourth quarter last year.

The yuan took a 2.1 percent share of worldwide payments in April, up from just 0.3 percent three years earlier, said SWIFT, a global telecommunications network for banks. Offshore issuances of yuan bonds surged 50 percent to 460 billion yuan in 2014, SWIFT added.

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