HSBC Prices Biggest Samurai Bond Deal Since 2009 at $1.8 Billion

(Bloomberg) -- HSBC Holdings Plc offered 181.8 billion yen ($1.8 billion) in Japanese currency bonds Thursday in the biggest single sale by an issuer in the Samurai market since 2009, according to data compiled by Bloomberg.

The London-based bank’s sale included 64.4 billion yen in 10-year notes priced at 1.207 percent, according to a statement from SMBC Nikko Securities Inc., a joint manager of the deal. The bonds are compliant with total loss-absorbing capacity, or TLAC rules, and investors could suffer partial or total losses on the offering if the financial holding company is liquidated, according to a filing by HSBC to Japan’s finance ministry this week.

French car-maker Renault SA also sold debt Thursday, offering 50 billion yen in three-year notes to bring total Samurai issuance in September to 276.8 billion yen, already the second-biggest month of sales this year. Bonds from overseas corporate issuers offer Japanese investors higher spreads than they can earn on domestic notes, with negative yields on government debt out to 10-years dragging down the costs for some locally-based borrowers to about zero.

HSBC’s sale on Thursday also included 58.1 billion yen in five-year bonds at a yield of 0.45 percent and 59.3 billion yen in seven-year notes at 0.842 percent. The last time an overseas issuer undertook a bigger Samurai deal was in February 2009, when Westpac Banking Corp. sold about 201 billion yen of Samurai debentures backed by the Australian government, data compiled by Bloomberg show.

To contact the reporter on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net. To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Ken McCallum, Benjamin Purvis